Zagg's (ZAGG) Bubble Will Likely Deflate
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Shares of ZAGG Incorporated (Nasdaq: ZAGG) are seeing pressure in early action Wednesday following a negative blog post at Roddy Boyd's Financial Investigator site.
The report claims that while the comapny may be able to continue its winning ways, all signs point to the company following the same fate as its predecessors - extinction. Boyd suggests barriers to entry to the company's main product, a cover protecting cellphones, are nil.
The Financial Investigator also raises questions about the company's management and board members, some of which have shady pasts.
The post concludes:
"Zagg might pull it off. But risk is nothing if not a gimlet-eyed assessment of a likely outcome occurring over a certain time frame. Seen that way, adding debt and expanding scale in a business that has all the appearances of a fad points to only one result: a cruel reckoning with the cold, hard laws of economic gravity.
Because that which is pumped up always deflates.
Shares of ZAGG are down 3.9 percent in early action Wednesday to $13.20.
The report claims that while the comapny may be able to continue its winning ways, all signs point to the company following the same fate as its predecessors - extinction. Boyd suggests barriers to entry to the company's main product, a cover protecting cellphones, are nil.
The Financial Investigator also raises questions about the company's management and board members, some of which have shady pasts.
The post concludes:
"Zagg might pull it off. But risk is nothing if not a gimlet-eyed assessment of a likely outcome occurring over a certain time frame. Seen that way, adding debt and expanding scale in a business that has all the appearances of a fad points to only one result: a cruel reckoning with the cold, hard laws of economic gravity.
Because that which is pumped up always deflates.
Shares of ZAGG are down 3.9 percent in early action Wednesday to $13.20.
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