However, investors shouldn't bank on that outcome. Bluefly still sports some troubling metrics. It has diluted shareholders in the past. The float rose from 19 million shares to 25 milllion, year-over-year, in the latest quarter as return on equity improved from negative 12% to negative 9.6% and return on assets rose from negative 19% to negative 14%. Yet, a climb into positive territory may be required to confirm to investors the company's long-run viability. Internet retail has boasted many top equities since the recession, including Amazon ( AMZN), which has returned 158% since the March 2009 low. Amazon, considered the Internet-retail bellwether, has increased its sales 32% annually, on average, since 2008 and net income 34% a year, on average. Bluefly, on the other hand, has suffered annualized sales declined of 1.1%. Although its operations have been streamlined, a major push is necessary to kick-start sales growth. The latest quarterly jump, 17%, is reassuring, but not necessarily repeatable. There aren't any sell-side analysts that cover Bluefly. Of the 30 largest institutional holders, which control the vast majority of the free float, nine increased their stakes in the latest reporting period, one sold and the remainder held steady. According to various measures, the stock is owned upwards of 90% by institutions and average trading volume is as low as 6,000 shares daily. So getting out of your position without affecting the price is difficult. This is a stock with anomalous risks. Still, given the big-name backing of Soros, Ainslie and the like, it's a compelling company. Another major stake holder is Prentice Capital which holds 7.7% of shares outstanding. Prentice is run by former SAC Capital traders Michael Zimmerman and Jonathan Duskin.
-- Written by Jake Lynch in Boston.
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