The outgoing CEO sold shares as part of a pre-arranged sales plan, so I would not use that as any indication for anything. He was going to sell if the price was $15 or $5. It is VERY rare that a pre-arranged sales plan that is filed in advance with the SEC gets stopped or modified due to a material event. I'm pretty sure that is illegal. Anyhow, I agree with the Sony thesis, but do not think it will be very easy for them to acquire the company anywhere south of the 'teens'. It simply would not be in the shareholders best interest otherwise. Skullcandy can be turned around and has zero debt and produces alot of cash consistently. It does not NEED to be taken over, but again I agree that the idea and synergies with Sony makes alot of sense. I also think we will see a number of licensing agreements and partnerships rolled out with streaming music, stereo equipment etc... all leveraging the powerful Skullcandy brand without any capital costs.
Why I Am Buying Skullcandy Shares Hand Over Fist [View article]
We also saw it with ADNC, when I wrote an article when it was trading at cash levels at $5.75 a few months ago. Pretty much nobody agreed with me at the time, as the comments show. I made a quick 40% on it in about a week off a sharp rebound. Analysts wrote it off and had targets as low as $4 (same as SKUL). It has since rebounded near as high as $15 and the same analysts are now putting price targets as high as $18. I'm also alot more confident in SKUL than I ever was in ADNC. I love the brand and I love Rick Alden. This guy is a genius and he will right this ship. I've traded in and out of SKUL since its IPO, but its cheap enough now that I am just holding a large permanent position. In fact, I won't be making another trade until I ultimately sell SKUL, which will be either when it gets bought out or trades in the teens. I'm taking some time off trading to concentrate on my advertising business, so I welcome the waiting game for once. It may trade lower, but I will just buy more. No fear.
Why I Am Buying Skullcandy Shares Hand Over Fist [View article]
1) Cash position is solid, $28m credit line and nothing drawn on it. New CFO is smart and has hedged international receivables so they don't lose like they just did with the HMV bankruptcy in Europe. Alot of risk out of the picture here.
2) Massive international growth story, still in its infancy. 100% sales growth YOY. Huge opportunity.
3) Alden mentions a 'major retail partner' who is begging the company to expand outside the headphone market and that is where the company is headed. Look for speakers and mobility devices. Should dramatically increase revenues with little to no marketing expense being complimentary. Leverage the strong brand.
4) Andrus, despite making terrible management decisions through his tenure, brought on a huge winner in Astro Gaming. This is probably why he scored the private equity job that specifically has him looking for small startups with $5m+ annual sales. Just like Astro. Gaming accessories will grow to be a $7B market in the near term and Skullcandy already has their foot in the door.
5) Abandoning Andrus' idea of staying 'authentic' by staying in small retailers like skate and surf shops. Sales in all channels have improved with big box exposure. Pretty clear that a Walmart deal is in the cards for this year. End of the day, much more sales, which is what its all about.
6) Consolidation in retail to 4 major headphone players, with Skullcandy being one of them. Retailers not carrying the 10+ brands anymore as consumers are getting confused and not buying any.
7) Margins will improve steadily throughout 2013.
8) Better optimization and streamlining of endorsements. Got the right stars, but not using them effectively.
9) Share price spiked initially over 10% with a mediocre release, shows that any slight average to good news can rocket this stock.
What A Management Change At Skullcandy Could Mean [View article]
You make some good points, Frank and were certainly on the right side of the trade back in November, but I still maintain for the wrong reasons. Skullcandy lowered guidance due to poor management (Andrus now out) and excessive stock compensation which directly eats into the EPS. Sales are strong and continue to show growth.
I still think you miss the branding story here. Headphones can be considered a commodity, sure, but Skullcandy is a strong brand. The same way that shoes can be considered a commodity but people pay a premium for Nike. This is marketing 101 and I don't understand how so many people, including Wall Street analysts, miss that point. Perhaps they are too old to understand the story, but the branding is working and Skullcandy is 'cool' among it's target market. Furthermore they do have new in-house proprietary sound technology along with a number of patents that cater to innovations like headphones that are stitched into hoodies, which is perfect for snowboarders. There is alot more to this story than meets the eye and I would not be so quick to write them off as a 'commodity', because clearly its a branding story.
The fact that you see value in the share price despite these misconceived notions, could mean that the bottom is in.
Why I Am Buying Skullcandy Shares Hand Over Fist [View article]
I think that Alden HAS to be frustrated seeing his once proud company flounder as it has on NASDAQ. Nobody wants to see that. Nevermind the fact that he has lost a tremendous amount of net worth. Its just my opinion but Andrus does not strike me as a serious hard nose business man, more of a rich kid living the life who still likes the party, maybe a little too much.
How offensive is it to shareholders to read PR after PR about open bar parties with models and pro athletes around the globe while lowering guidance? Guidance could have been kept in tack or raised if a little spending caution was used and/or some stock compensation was scaled back. We aren't talking about a multi-billion dollar company spending $100k on a party which wont affect the bottom line, but to Skullcandy every dollar counts. Great brand and super cool people, but at some point somebody has to come in and draw a line in the sand. This is a company that is BEGGING to go private and be managed by real corporate bean counters who will make everybody accountable for every penny that is spent.
The ground has been laid for a takeover. Everything about the company with regards to returning shareholder value has failed, but that won't matter going forward and you can bet that Andrus' resignation has alot to do with irresponsible mismanagement. Look at his new role, he is a very smart and creative guy but not management material for any publicly traded company.
Why I Am Buying Skullcandy Shares Hand Over Fist [View article]
What is good is that Andrus will have no say going forward. He is off the board and no longer CEO. Perhaps that was the bone of contention? Him wanting to remain 'authentic' with Alden and the rest of the board wanting to go more mainstream with Walmart etc... What makes no sense to me is that they are in Target, which is pretty much like Walmart anyhow, so I don't understand why Andrus is so against Walmart? If you recall the Bloomberg Enterprise video where they asked Andrus about Walmart, I thought his strange response about "let's not go there" was a 'tell' that there was a deal in the works but now it seems obvious that it was a "don't ask me about that, as I'm in that fight every day with the board etc...". Obviously as CEO he can prevent Skullcandy from going to Walmart, but clearly the shareholders suffered as a result. The fact that he held out so long though is almost building up some goodwill when they do actually go into Walmart (and this WILL happen) and it will be a major splash.
Why I Am Buying Skullcandy Shares Hand Over Fist [View article]
Agree with the little appeal to the enthusiast market, although with Supreme Sound and in-house engineering that could change quickly. Although they don't really need this market as they have set their sights on the $50-$150 sweet spot and market to the active lifestyle.
Nothing is cooler than the Skullcandy skull logo and the fact that I'm seeing it on people's cars, snowboards, dirt bikes, is super cool. A company like Sony, who lacks the cool factor, would be silly not to pick this brand up on fire sale especially with the emerging gaming technology that can be bundled with PS.
Why I Am Buying Skullcandy Shares Hand Over Fist [View article]
I think it is a better buy after the CEO departure. Andrus, while super creative and innovative, did nothing to protect shareholder value. Alden, who founded the company, has seen his net worth plummet as a result. He is coming in to right the ship, and that could include a takeover deal. Even Bloomberg is speculating on the potential for a takeover. Skullcandy is a cash cow with growth and very strong branding that could easily be trading in the teens and be considered a value play.
Stem Cells, Dr. Oz And A Potentially Lucrative Investment Opportunity [View article]
Huge volume the past few sessions. I can't buy the run-up, but stocks like this have a tendency to fall quicker than they rise. I think there will be another shot at $0.05 for those who missed the run.
Stem Cells, Dr. Oz And A Potentially Lucrative Investment Opportunity [View article]
Definitely agree with that as I don't normally even trade in penny stocks but their incentive packages were a turnoff on a cursory look at the company. Although at $0.05 like I mentioned a few sessions ago, it could be worth a flier.
Stem Cells, Dr. Oz And A Potentially Lucrative Investment Opportunity [View article]
Geron still has significant stem cell assets. BioTime (made up of former management from Geron) is currently bidding on them. So no misrepresentation here, as I am well aware that their stem cell research program is stagnant. The Pluristem issue was addressed (yes its placenta based stem cells rather than embryonic).
I love writing about stem cells, it always brings out the most controversy about anything I ever say! I must say that those who follow the industry do so with real intensity and I'm always forced to edit something even after multiple fact checking sessions before clicking 'submit'.
Stem Cells, Dr. Oz And A Potentially Lucrative Investment Opportunity [View article]
I did notice that in my preliminary research into ACTC that management is VERY well compensated for what so far has been just hope and dreams. Its always painful to invest in small biotech companies when your shares get constantly diluted to essentially just pay massive executive salaries and bonuses. Thats the name of the game though.
Will Sony Buy Skullcandy? [View article]
Why I Am Buying Skullcandy Shares Hand Over Fist [View article]
Why I Am Buying Skullcandy Shares Hand Over Fist [View article]
2) Massive international growth story, still in its infancy. 100% sales growth YOY. Huge opportunity.
3) Alden mentions a 'major retail partner' who is begging the company to expand outside the headphone market and that is where the company is headed. Look for speakers and mobility devices. Should dramatically increase revenues with little to no marketing expense being complimentary. Leverage the strong brand.
4) Andrus, despite making terrible management decisions through his tenure, brought on a huge winner in Astro Gaming. This is probably why he scored the private equity job that specifically has him looking for small startups with $5m+ annual sales. Just like Astro. Gaming accessories will grow to be a $7B market in the near term and Skullcandy already has their foot in the door.
5) Abandoning Andrus' idea of staying 'authentic' by staying in small retailers like skate and surf shops. Sales in all channels have improved with big box exposure. Pretty clear that a Walmart deal is in the cards for this year. End of the day, much more sales, which is what its all about.
6) Consolidation in retail to 4 major headphone players, with Skullcandy being one of them. Retailers not carrying the 10+ brands anymore as consumers are getting confused and not buying any.
7) Margins will improve steadily throughout 2013.
8) Better optimization and streamlining of endorsements. Got the right stars, but not using them effectively.
9) Share price spiked initially over 10% with a mediocre release, shows that any slight average to good news can rocket this stock.
Why I Am Buying Skullcandy Shares Hand Over Fist [View article]
Margins will increase steadily all through 2013 and they are cash flow positive.
What A Management Change At Skullcandy Could Mean [View article]
I still think you miss the branding story here. Headphones can be considered a commodity, sure, but Skullcandy is a strong brand. The same way that shoes can be considered a commodity but people pay a premium for Nike. This is marketing 101 and I don't understand how so many people, including Wall Street analysts, miss that point. Perhaps they are too old to understand the story, but the branding is working and Skullcandy is 'cool' among it's target market. Furthermore they do have new in-house proprietary sound technology along with a number of patents that cater to innovations like headphones that are stitched into hoodies, which is perfect for snowboarders. There is alot more to this story than meets the eye and I would not be so quick to write them off as a 'commodity', because clearly its a branding story.
The fact that you see value in the share price despite these misconceived notions, could mean that the bottom is in.
Why I Am Buying Skullcandy Shares Hand Over Fist [View article]
Why I Am Buying Skullcandy Shares Hand Over Fist [View article]
How offensive is it to shareholders to read PR after PR about open bar parties with models and pro athletes around the globe while lowering guidance? Guidance could have been kept in tack or raised if a little spending caution was used and/or some stock compensation was scaled back. We aren't talking about a multi-billion dollar company spending $100k on a party which wont affect the bottom line, but to Skullcandy every dollar counts. Great brand and super cool people, but at some point somebody has to come in and draw a line in the sand. This is a company that is BEGGING to go private and be managed by real corporate bean counters who will make everybody accountable for every penny that is spent.
The ground has been laid for a takeover. Everything about the company with regards to returning shareholder value has failed, but that won't matter going forward and you can bet that Andrus' resignation has alot to do with irresponsible mismanagement. Look at his new role, he is a very smart and creative guy but not management material for any publicly traded company.
Why I Am Buying Skullcandy Shares Hand Over Fist [View article]
Why I Am Buying Skullcandy Shares Hand Over Fist [View article]
Nothing is cooler than the Skullcandy skull logo and the fact that I'm seeing it on people's cars, snowboards, dirt bikes, is super cool. A company like Sony, who lacks the cool factor, would be silly not to pick this brand up on fire sale especially with the emerging gaming technology that can be bundled with PS.
Why I Am Buying Skullcandy Shares Hand Over Fist [View article]
http://bloom.bg/Z5F0tA
Stem Cells, Dr. Oz And A Potentially Lucrative Investment Opportunity [View article]
Stem Cells, Dr. Oz And A Potentially Lucrative Investment Opportunity [View article]
Stem Cells, Dr. Oz And A Potentially Lucrative Investment Opportunity [View article]
I love writing about stem cells, it always brings out the most controversy about anything I ever say! I must say that those who follow the industry do so with real intensity and I'm always forced to edit something even after multiple fact checking sessions before clicking 'submit'.
Stem Cells, Dr. Oz And A Potentially Lucrative Investment Opportunity [View article]
Stem Cells, Dr. Oz And A Potentially Lucrative Investment Opportunity [View article]