Did another channel check today (Shopko).
2XL is pretty poorly positioned.
Beats are 40 bucks off + a Shopko 40 buck gift card. 80 bucks off total. 250-350 sets. Under 250 sets discounted as well.
That's an old sales trick (discount card)
It also traditionally is an indication of pressure on manufacturer's via the store for pricing points and first step of PEG space reduction.
I saw a few 50 buck discount coupons laying around Best Buy yesterday near the Beats display, but not the SALE + Gift card markings like at Shopko.
Consolidation will happen soon....
Sentiment: Strong Buy
Thanks for the news, but I'm not sure that I'd read too much into it. It may just be that Shopko shoppers are not a good target market for Beats. I've only been in one Shopko and it seemed quite low end to me. It looked like none of the shoppers there had an extra $250 to blow on headphones.
This stock makes me sad - not just because I made so much money off it last year and now its totally dead money - but just because they make really good products - I cant believe someone wont come along in the next few months and take it private for 9 or 10 bucks a share - if you buy it at 9 you can get 280 million in rev for a 270 million dollar buyout? seems nuts -
That being said I only have myself to blame - I kept going back to the well on this one when the CFO leaving should have been the biggest tip off - good companies dont have stuff like that happen - just a sign of the mismanagement that was always there I suppose ....
maybe I will buy some Jan 2015 calls on them and then just ignore them for 6 months - Dunno
can believe this thing went public at 20!! jeeeesh!!
Anyway I am flat again - sorry i came back to jinx it for everyone ...
Yep and Mitch left complaining about the IPO. Hindsight huh? 20 bucks a share, 2 guys get 40% of the company (Alden 33% and Andus 8%)... Share dilution after lock up period of 6 million shares. As you ou I was totally blind sighted by the hype.
Good news is that is all old news. The company will address all this... May take awhile :(
It scares me a little too...
I actually thought about the Shoko thing a little more... Shopko is a deep discount chain. Skullcandy is not in there (except 2XL). The client base are bargain shoppers. I suspect Beats (in this case) can't sell into this low end market.
What I mean about consolidation is that there are only so many kids that can afford 250-499 headphones.
I was reading Koss's analysis of the market from their filing in 2011. At that point they already had stated 2 interesting things.
They noted that there was a noticeable shift of sales away from the holiday's as ear phones were becoming more of a disposable item.
The above is evidenced by the influx of mobile devices.
This was already noted for the period 2009-2010
Beats in particular are 1 off consumers. Get their high end set (w/quality issues for that price range) wear them heavily (w/mobile devices) break them, and get upset and some go back into a less expensive option (Less expensive over ear or a pair of buds).
Bose and other high end sets are not designed for that kind of wear and tear. They are for home use with a stereo. Not for the slopes or active use. You pack them up in a case, cherish them.
Just some thoughts here. Skullcandy has hit the sports lifestyle crowd. The earbuds and cassette style fits well there with the abuse and fit needed for active use.
Beats are mostly in a much higher price range. Even at the 30% off sales we keep hearing about for beats, if you spend a lot of time in stores, it gets harder to see the combat between the two brands that analysts are talking about.