GYMBOREE’S STOCK DANCING THE BUNGEE BOOGIE

THE action these days at Gymboree is enough to provoke vertigo, and we’re not talking about the kids bouncing up and down on the mini-trampolines at its various retail locations.

We’re talking about the stock, which has been bouncing around itself, but lately took a leap to bring

it to a five- month high.

In a period of just four days in the last two weeks, the stock rose from $3.13 to $4.63 without any news driving it.

Documents filed with the Securities and Exchange Commission disclosed that insiders, including CEO Stuart Moldaw, have been on a buying spree. Investors who watch for signs of insider buying, figuring that this is a bullish signal, have followed suit.

What these investors don’t know is that Moldaw’s recent $5 million investment in the company is not necessarily a signal of renewed confidence in its ability to turn around and pull itself out of penny-stock status at all.

Moldaw, who became CEO in February when Gymboree tossed out its executive team and put a new one in force, is buying because this is one of his first chances to do so.

“The capital infusion came too late for one of Gymboree’s institutional investors, Capital Research & Management Co., which operates the American family of mutual funds,” said Tim Middleton, an analyst who closely monitors SEC filings at EDGAR Online.

In another recent SEC filing, Capital Research disclosed that it eliminated its position in Gy