Crocs (NASDAQ:CROX) remains an ongoing train wreck. Unfortunately for its shareholders, this once-mighty momentum stock is looking closer to worthless all the time.

In conjunction with filing its most recent 10-K, Crocs disclosed that auditors Deloitte & Touche raised substantial doubts about its ability to continue as a going concern. I feel a bit vindicated, having said several times that I wasn't entirely convinced this company would survive the terrible economic climate and Crocs' status as a fading fad. (Was Microsoft's (NASDAQ:MSFT) Bill Gates a little addled to load up on Crocs' shares recently?)

Crocs has $51.6 million in cash and equivalents, but also $22.4 million in borrowings due April 2. In the latest fiscal year, its loss was $185.1 million, as revenue declined and it had to take one-time charges related to restructuring. The company said it is trying to extend its credit facility and negotiating to get an asset-backed lending arrangement. Crocs revealed in its 10-K that if it can't secure additional financing and keeps incurring losses, it may not be able to continue operating its business. According to the company, existing cash balances and cash flows are sufficient to operate through March 31, which a quick glance at the calendar reveals to be all too soon.

The "going concern" modification is significant and downright scary, but far from rare these days. General Motors (NYSE:GM) is an obvious high-profile example of a company haunted by concerns that it can't keep on keepin' on.

Given Crocs' precipitous fall from heady highs near $75 per share in late 2007, it's practically a poster child for faddish momentum stocks that can lead some investors to forget their common sense. (Even analysts succumbed, as I pointed out last summer in questioning Crocs' then-current consensus growth projections.)

True, most stocks have experienced terrible cuts as their growth faltered during the current economic difficulties. Unless you owned shares of, say, Wal-Mart (NYSE:WMT) or McDonald's (NYSE:MCD), it's been hard for almost any investor to boast of outperformance lately.

Still, with Crocs, many investors paid a premium price for a shoe stock at high risk of exhibiting only fad-driven growth -- rather than truly sustainable growth -- and ignored important red flags such as burgeoning inventories. Hopefully, this can be a long-term lesson on the risks that individual investors should weigh very carefully when buying stocks.

Crocs is now trading at only about a buck per share, but as far as I'm concerned, it's a penny stock for a reason. Anyone who's still considering loading up on Crocs shares because they look "cheap" might as well buy a lottery ticket instead. There are plenty of cheap stocks out there, representing strong companies with much better survival chances. Walk away from Crocs.

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