I think the message boards analysis of the credit line is missing the biggest point about the new credit line. Skullcandy's old credit line with PNC Capital restricted Skullcandy from ever being acquired. Skullcandys new credit line with Wells Fargo always them to be acquired with consent from Wells Fargo. This is a huge change from the previous contract. With the requirements in the current contract the chances are very slim Wells Fargo would exercise their right to deny Skullcandy a merger.
Their is no premium in the stock price right now for a possible acquisition. The stock price is reflecting a declining gross margins and sales growth in the low single digits. The headphone market however is forecasted to grow at 12% y/y for the next 5 years, and with Skullcandy position as the #4 player in terms of revenue share gives that a great chance to capture some of the markets organic growth.
This is where the arbitrage in price will be coming from. There is no gaurentee Skullcandy will be able to hold their market share but I have a lot of faith in Hoby and the new direction of the company.