Unfortunately that's the norm for outgoing CEOs.
Actually I give Andrus an A for his growth/marketing contributions. But I have to give him an F for shareholder value. We live in an "immediate gratification society" and none of that was going on. I'm sure the investor relations person has been underpaid for the last 6 months:) Too many investment firms complaining and the board had to act.
But that said, the Skull brand is loud and strong, and as a long term investor and for the health of the company, that is good. The CEO provides the vision and culture. The guys below him (CFO and SVPs of marketing/sales/operations) should be handling the pricing and distribution models. Granted, the CEO hires and controls these folks.
Skul is everywhere and recognized and making money. Still innovative and expanding into new markets. So it's not like the company has to lay off people and create a new strategy, but rather expand and tweek on their current one.
Better days ahead.
Did you read the Wall Street Journal piece today. Talk about connections to the Romney's! I just find tat fascinating for some reason.
Regardless he stated he has no intention of selling his stake in SKUL equity. Sure buddy...
He still owns 7.8% of the company according to the report.
Yes, this stock is down 71% since its IPO, and Management gets paid like kings for destroying shareholder value.
Very few companies are worth investment in their common stocks. Corporate Bonds, or Preferred Stock shares... maybe... But very few are worth buying the commons. People who buy those Common Shares are literally giving charity by the millions to rich executives... It's like Robin Hood, only in reverse. Stealing from the commoner and giving it to the rich.
There's two kind of people; those in the club and the rest of us.
The rest of us should not invest in their scams, trade yes, invest no.
Consider the billions that go into 401k's every 2 weeks like clock work by the sheeple. They can only go long....invest. It's a huge conspiracy.
That is such (all the swear words you can imagine)!!!! But I am not surprised. Let someone F things up and then reward them handsomely.
Or maybe (thinking positively) this was an incentive to get that Andrus kid out the door without a fight, in which case it may have been a really smart move.
He is walking with 190,000 of direct ownership in shares or 1.2 million at current prices. He sold 230,358 shares at IPO for 4.6 million!
Guys, this is why Wall Street calls this a "botched" IPO. Insiders controlled (and still do) and payed themselves very well.
The overall financial health of the company is OK. Just that the insiders Alden, Andrus, Kearl all cashed in and are still cashing in at the expense of the overall shareholder value. This is why Institutions have stayed away.
The buy back is their (insiders) last chance to get some shares off the market and pay themselves for the shares they hold (as the buyback shares will be utilized for indirect holdings)
Otherwise this stock keeps on getting even more diluted - 22 million to 28 million shares at end of 2011 to 28 million end of 2012.
That is 21.5%!
That my friends is directly related to EPS. The earnings would be 1.2 EPS for 2012 without the dilution.
Alden holds the bulk of that dilution. Andrus still has a stake.
And they actually still SELL into the market even with a declining stock value of 75%
Again, the IPO was structured poorly for a small cap high risk entity. They sold the IPO on Growth (which would absorb the diluted shares). But right now the growth is stagnant.
I'm not saying its not a good product, that the company wont be making money etc...
I'm just saying that they (Alden Andrus Kearl (well he sold out already) got caught with their hands in the cookie jar, just like greedy little kids.
Oh well, I see this thing going up in the near future on buybacks, announcement of a new CEO, private and public takeover news, inroads into gaming. Its going to be a slow and painful ride along the way.
They still have a very strong retail market position in that 19-99 dollar range (Forget the 100+ range for now). The problem I am seeing is that the high end stuff by others is not selling as good and will continue to shrink into the range that Skullcandy is protecting. Beats and others are heavily discounting the 399 sets as the market can not (well their target demographic) cant keep replacing 400 dollar headsets.
This may work out for for SKUL in the future as competition contracts, but short term there will be a glut of these higher end discounted sets available.
Just walk into a Best Buy and look at the shelf space taken up Beats and Monster and Soul and look at the 2 pairs of Aviators there (if that at my store). Last Summer it was a totally different look and story. I may add that SKUL still dominates (My) local Target overall across the board.
Mid range they still are a major player (and they do well with 2XL). They have a "new look" trickling out as well (overhaul of headsets available, names, new sound profiles etc) They do have potential in gaming.
It's not all gloom and doom, but the #$%$ just hit the fan here.