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suggested that the company could be a takeover target.
Like other recent IPOs, Skullcandy's shares have slid since the company went public. In mid-2011 SKUL was trading around $20. With its recent tumble, SKUL has fallen into the single digits.
Yet, the company produces cash. And, perhaps most impressive, it has brand recognition in an industry -- earbuds -- that is largely a commodity business. What's more, the growth of mobile devices like smartphones and tablets ensures that earbuds will see consistent demand for years to come.
But who would want to purchase the headphone maker? And why?
Sony (NYSE: SNE): Bloomberg specifically mentions Sony as a possible acquirer. Sony already has an extensive earbud and headphone division, but in recent years, the company has lost the premium name recognition it once relied upon.
With the company looking to become a premium player in the smartphone market, pairing Skullcandy with its phones could create a potent combination.
Microsoft (NASDAQ: MSFT): The Redmond-based tech giant has long been seen as a software -- not a hardware -- producer. But with the release of the Surface, Microsoft has shifted into becoming a hardware layer.
Nike (NYSE: NKE): This pick may seem unusual given that Nike is a sports apparel company. However, Nike took a step into the consumer electronics space with its Nike+ FuelBand last year.
The FuelBand is a smart pedometer that tracks a user's movement and communicates with a smartphone. Since hitting the shelves, the device has been a solid seller despite mixed reviews.
Regardless, the exercise electronic space appears to be a growing one, with Motorola entering the market with its Android-based MOTOACTV smart mp3 player/heart rate monitor.
If Nike wants to continue to be a player in the space, acquiring Skullcandy might make sense from a strategic electronic standpoint. Skullcandy is a winner.