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Skullcandy, Inc. Message Board

  • michaelsistowicz michaelsistowicz Feb 2, 2013 2:37 PM Flag

    Last weeks "Hair Cut" and delusion of float.

    Look at it this way. The market just got 600,000 shares of stock it needed to absorb last week. Do the math on the share price as you look at the float (change) as indirect shares come flooding into the market.

    No news, no change and the stock gets an 8% haircut from it's 6.90 share price.

    The "share buy-back" if and when it is established is a vehicle to stop these dips on insider delusion of shares.

    What I would like to see is management taking a stand (even if temporary) of not filing any shares in the near future. Perhaps a buy of direct shares as a token of good will.

    The market is not at all interested in this stock at this point in time. I would assume that Alden's ego thought the market would absorb these shares. He was proven soooooo wrong.

    Good news - those shares are absorbed now. It wasn't selling per say (in my opinion) although this last dive bomb surely has spooked some more investors.

    OP - This is not fundamentals talking (as you say are non existent in the market sentiment) and that is true to a point. It s simple math here.

    We have 11 days up until Earnings to see if there is some accumulation of shares...

    Then (Hopefully) a professional and thought out conference call by Andrus and Wescoat.

    Let's see if they stop throwing toys around and out if their sandbox and start playing in the real world.

    We will see....

    Sentiment: Strong Buy

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    • Michael,

      I would be super P.O.'d if I were you. The management is going to put the company in debt so that the insiders can continue to sell.

    • I would guess the stock stays pretty steady through earnings. Potential investors are on the sidelines waiting to see Q4 and 2013 guideance, plus any other comments mgnt may have on the headphone market. Lots of uncertainty around this segment as there is hardly any data or history for analysts to crunch numbers and predict the future. Skul gave hints of margin compression and that noise scared everyone away...better to error on the cautious side.

      The headphone craze is very recent and it's hard to predict how it will evolve and who will survive. Skul is basically the only public company providing detailed reports and speaking about the sector, and that's only been 5 quarters. The analysts are leaning on their every word to better understand what's happening. All other companies are private or offer headphones along with other products (Sony) so we can't make comparisons within the sector to better understand... it's nearly impossible so investors are listening to a couple of analysts and sharing their brain.

      The Q3 earnings and call were more monumental than anyone could ever have predicted. I am confident that if margins would have remained around 49-50%, there would have been no discussion of margin compression and the analysts would have walked away thinking Skul had lots of potential and this stock would be 20+ today. I know...alot of ifs ands and buts, but the point is that one quarter's numbers along with a 1 hour mgnt call has signifcantly changed the opinion of the headphone market and moved this stock price. OP would say otherwise and that's fine, but I think the analysts would have piled on with more buy ratings which would have attracted more big money. It could have all come crashing back down this quarter if margins compressed and the analysts did their downgrades. Point is that one quarter created a new trend, but that could easiy be reversed.

      • 1 Reply to chaz16669
      • One little adder here. KOSS has been in the headphone market since the 50's. not sure how long as a public traded company but for more then a decade. They just reported and it was a disaster. They stated US sales were ok, but Europe was a bust.

        They are a 35 million market cap, family run business. They were paying a 4.7% dividend, but by the looks of their EPS, they will now be utilizing cash or barrowing to pay the dividend as their EPS is less then their payout.

        Just a sample and I would gather that competition has slowed them. I'm not sure of the %, but a portion of their sales is producing classical music.

        Their stock trades extremely light in volume and is extremely light in institutional ownership.

        Not a direct competitor of SKUL in the sense KOSS sells higher end over the ear - Bose and the likes would be there nemisis. Although they have started to jump on the band wagon by signing on Olympic skiers as spokespersons. I would say that is their attempt at stealing some of the action sports market that they must see profitable and growing (SKUL stronghold).

        They didn't seem to get much share as the earnings were very weak.

        I know it's an OP Hot Stock, he says its going to 8... Their quarter was terrible. Stock lost traction. I would bet they will suspend the dividend or decrease it.

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