If you can handle some risk, then long term options could give you some excellent, inexpensive leverage. It will also make the shorts to cover faster. They don't want to be stuck with thousands of calls outstanding and no shares available to buy. A-la Wolkswagen sqeeze.
To keep shorting stock with P/E of 6 and market CAP of $170 MIL doesn't make sense for me
1. There are tons of stocks with P/E 1000 or worse NFLX, WDAY, AMZN,CRM, N
2. Just thinking that some fund can buy all options and then start buying stock. All they need is $50-$100MIL and make shortsellers cover at whatever they want to let them out $20-$30-$50
makes shorting this stock extremely risky proposition. Shorts will cover and stock will go to
$12-$20. Hopefully Andrus will use his new job connections to squeeze shorts to that price.
1. Even if Skullcandy will not grow, it is valued as a value stock.
There is 0 reasons for shortsellers to be stuck with the stock that doesn't move down big time.
So they will cover, and that is 10,000,000 shares that they need to find. Only this will propel the stock to $12-$14.
2. Possible acquisition. Skullcandy is a very cool company. They have a brand that popular with youngoo people and kids. For companies like SONY to buy a competitor for $300mil, would be a very good deal. They will get much needed cool factor and get more flexibility on pricing.
Disclosure: I am LONG Stock and Long Term Options until $12-14, will add stock and long term in-the-money options on pullbacks.
Good luck to everybody.