Originally Posted by
impact500
Jim Stone: <<I wondered why the stock fell. It will be back. pearle (lens crafters, luxottica) will win this one though.>>
There are likely two factors that have had a larger impact on LUX's stock beyond the court decision - the falling stock markets worldwide and the euro-US$ exchange rate. The stock peaked 4 or 5 weeks ago and has fallen fairly steadily since then. The court decision was only issued two days ago. It did have a negative impact but it is likely only in third place as far as causes.
Also a reading of the court decision may reverse your decision that they will win in the end. It is very interesting reading.
The number of Pearle stores in CA is small so the worst case impact is limited. The key question will be the Lenscrafters case which has been suspended for some time at a lower CA court pending a decision in Pearle at the CA Supreme Court.
Duly noted that other CA cases have been decided in the opposite direction although the issues are somewhat different in each case. Also this is the first of the cases to reach the CA Supreme Court.
It is hard to read the decision and reach any other conclusion but that the operations of national chains in CA will be impacted to a very large degree. Of course there will be appeals and the Federal system may provide escape. My guess is that this is a very significant ruling that will have long term consequences.
I do agree that LUX's stock price will come back. It might have further downside first, however. The US$ may be the biggest challenge for LUX now.
These are amateur comments and may be wrong.
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