Shares of online clothing retailer Bluefly (Nasdaq: BFLY) were pounded on Thursday, falling nearly 20 percent and closing down 3-1/16 to 12-9/16. What’s bizarre about this is that Bluefly announced early Thursday that it had signed a comprehensive marketing deal with Excite. The deal with Excite is good news. So what gives?
Well, Bluefly CEO Ken Seiff’s Thursday appearance on CNBC didn’t help things. CNBC wanted to focus on fundamentals and asked pointed questions about the bottom line. Truth is that Bluefly, like most Internet companies, isn’t making money yet. Seiff was basically forced to defend his company on TV, and Wall Street apparently didn’t like that.
This is all rather silly. CNBC could have gone after the CEOs of countless Internet companies in this manner. Seiff just happened to be the unlucky guy who walked into the ambush. Of course, this isn’t the only reason the stock was down.
Bluefly had a nice run-up before Thursday, so some of the sell-off was profit-taking. The stock was actually below $10 (US$) three weeks ago, and got a boost from the company’s new deal with the Go Network. Overall, things at Bluefly aren’t bad.