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Skullcandy, Inc. Message Board

  • goldenseth Feb 2, 2013 5:26 PM Flag


    74% of a 27 million float is owned at the institutional level and people are claiming manipulation by big money. What big money? With all due respect to every participating member on this board, 74% of such a small float owned at the institutional levels says one thing, the institutions don't yet know the story. A float this small should have near 100% institutional participation, at worst 90%. This is a fault of management and the IR department respectively not detailing the story appropriately. I've seen it before and it looks like this is the perfect opportunity.

    In my opinion, this is the sweet spot for investors to take long term advantage of a widely misunderstood or under evaluated company and business model. Again, I've seen this many times before too. The company's recent decision to have an investor day goes a long way toward addressing this issue.

    Fundamentals are easy to see if the analyst has even simplistic vision
    1. mid 40-50% gross margins
    2. strong aptitude toward R&D/product design
    3. growing in channel and growing additional channels
    4. broadening product category within channel
    5. recognition of competitive hurdles
    6. no debt and good credit facility
    7. aptitude with acquisition synergies
    8. new pipelines widely available
    9. advancing category
    10. international expansion in infancy
    11. SKUL boat leaning heavily bearish, at some point...

    I could go on and on but I think most get the picture that is currently presented in the business and can forecast beyond the next few months. Long term picture looks good and patience should be rewarded.

    Sentiment: Buy

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    • Seth,

      Thank you for your respectful post.

      You neglected to mention the 35% short interest.

      The big money, the big players, the professionals, are just a name for the aggregate composite of operators with sufficient capital to contain the price within a trading range wherein they establish their positions. These could be investment banks, countless independent brokerage houses, hedge funds, or just very rich individuals. These are not the institutions, who are commonly referred to as dumb and slow by professional traders.

      As you have probably gathered I do not trade on fundamentals. It's impossible in my opinion. For example, your list of "positive" fundamentals are, for the most part, squishy; or subjective. But let's just assume you are right. It still doesn't mean the price could go much lower. That is why I just follow the money (price and volume). When this shows a sign of strength then I will buy the first retracement; the low-volume retest.

      • 1 Reply to onepoint272
      • Meant to say that even if you are right about the fundamentals it does not mean the price CANNOT go lower. It can go lower, despite the opinion of the public about the fundamentals.

        If you had millions of dollars to trade SKUL, you could make it go your way too. If you had millions of dollars to concentrate on SKUL you would not concern yourself with whether or not your campaign was against the general public opinion of the fundamentals. You would trade it to make money, period. You would create fear or greed in the minds of the public.

        The best thing the sheep can do is learn to recognize what the big money is doing, learn to recognize the signs of trend change.

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