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Mad Catz Interactive Inc. Message Board

  • orourke99 orourke99 Jan 9, 2013 3:31 PM Flag

    SKUL shares edge higher in trading today amid talks that the company maybe a takeover target.

    Very Interesting.......

    Skullcandy shares are gaining after Bloomberg said in a report that the sharp decline in the stock in the past 18 months has made the company an attractive takeover target. SKUL shares have fallen sharply since the company completed its IPO in July 2011. The stock has fallen nearly 64% since its IPO amid concerns over increasing competition and the company's strategy to focus on lower-margin designs.

    However, Bloomberg believes that the company's extremely low valuation makes it a takeover target. According to data compiled by Bloomberg, SKUL's enterprise value of 3.9 times earnings before interest, taxes, depreciation and amortization (EBITDA) is below 96% of the stocks in the Russell 2000 Index.

    Speaking to Bloomberg, David King, analyst at Roth Capital Partners LLC, said that he doesn't get the sense that management is wanting or would look to sell at these levels, but you cannot ignore that as being a possible outcome when the stock is trading where it is and the value being as cheap as it is. King believes that despite the pressure on SKUL's business, shares have fallen too far and that could spur a deal.

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    • Interesting info. Made me look at SKUL financials for the first time in detail and man o man are they cheap. Assuming revenue and profits don't fall off the cliff they are way too cheap.

      I would buy some....except for the fact that the short interest is so high. That is enough to keep me away as those guys are relentless and usually correct.

      Maybe Tritton has just a wee bit to do with SKUL's alleged struggles...but me thinks it has more to do with the big companies like Sonly and Bose and a zillion others.

    • A sharp decline in a stock price means the company is suffering. Hence the sharp decline in stock price. Maybe a buyer can see new management turning its recent failure around. Which would take years of new product design, tooling rebranding etc. Stay well away. This company has already implemented the necessary changes.

      Sentiment: Strong Buy

0.42-0.03(-5.77%)Dec 1 4:00 PMEST