The Sharper Image (SHRP) is getting closer to becoming a Penny Stock

SHRPShares of the Sharper Image Corporation  (Public, NASDAQ:SHRP) fell 18% this morning and hit a new 52-week low of $1.74 a share.  The reason this time? Traders are fed up with the lawsuit over their wonderful air filters.

Last Thursday a federal judge on rejected a proposed settlement that would have required troubled SHRP to distribute $19 coupons to millions of consumers who bought air purifiers alleged to be defective in a class-action lawsuit.

The Sharper Image has lost $113 million since January 2005.  Tack on the estimated settlement could be worth $60 million to the 3.2 million consumers eligible to participate and people are abandoning the company stock. Other documents in the case estimated about $25 million of the coupons would be redeemed.  Of course it doesn't help when your September sales fall 39%.

Bargain hunters looking for wounded prey should stay clear, at this point SHRP may loose another arm and a leg and fall to $1 a share.  Even if shares hit $1.50 then it might be time to give this stock a chance, and if it goes any lower?  Penny stock madness will kick in.

Frank Lara Jr.

Article by Frank Lara Jr.

Co-Founder of TheStockMasters.com


 

The Stockmasters Master Picks newsletter has been kicking ass and taking names for the past year. Our new publication comes out on Monday (10/15) and we'll be cashing out the following stocks for some easy and quick gains:
Activision, Inc. (ATVI) is up almost 20% since April 2007.

Service Corp. International (SCI) is up 43% since our first newsletter back in October 2006.

March 2007 we said buy Halliburton Company(HAL), it’s up more than 25% since then.

Blockbuster Inc. (BBI) has gone up 36% since we told you to buy back in June 2007.
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