Shares of Lululemon Athletica inc. (LULU) are under pressure today as they drop 7% and hit a new annual low. This is significant as the stock is flirting with breaking below the July 2007 IPO levels. In other words, nearly all holders who bought after the IPO are now sitting on a loss.

I last revisited the stock in early-June, after the company failed to deliver on earnings. A point noted there, which still hold true, is that short interest is a potential driver, but one that needs a catalyst. With the stock hitting new lows, it seems that the short sellers have little to panic about.

Today's push to new lows follows the recent call activity that my colleague Elizabeth Harrow discussed. She ended that column by saying - "Overall, LULU looks like a stock to avoid, at least during the near term." I would agree with that, especially with the potential for an "IPO-break" developing.

Chart Courtesy of Thomson Financial