Shares of Skullcandy are up 10% in two days since management released the terms of their new credit line on Wednesday after market close.
The new credit line has favorable terms for the company. They don't use the credit line often but it gives them freedoms them didn't have previously. Most importantly they now have the ability to become acquired or merge, and they can do up to $50MM in share buybacks over the next 5 years at a 1.5% premium to LIBOR.
I also liked the net income provision, it gives investors assurance they will remain profitable over the next 5 years.
Very favorable terms and it reaffirms the bull's POV on this stock as its a balance sheet and value play in worst case scenario. Best case scenario, the turnaround is successful and it returns as a growth play and the share price can go up 10 times from where its at realistically in a few years.