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Skullcandy (SKUL -9.4%) plummets to new post-IPO lows after receiving a two-notch downgrade to...

Skullcandy (SKUL -9.4%) plummets to new post-IPO lows after receiving a two-notch downgrade to Underperform from Jefferies, which cites a lack of pricing power and growing competition. The headphone vendor, which had 39.7% of its float shorted as of Dec. 14, now trades at 7x estimated 2012 EPS.
Comments (5)
  • Yup. Never a good sign when your "premium earbuds" are getting promoted at the EBAY deal of the day for $5.
    2 Jan 2013, 10:11 AM Reply Like
  • Problem is that Skullcandy is not one I would consider "premium" - they are more like Bose - middle-of-the-road and overpriced. For sound quality they don't compare with the real premium brands like Denon, Sennheisser, and Beyerdynamic.


    But if it goes back under $6.75 it might be worth picking up a few shares.
    2 Jan 2013, 10:21 AM Reply Like
  • yeah hence I say "premium" with quotation marks. I think they are decent, but I've heard some knockoff chinese earbuds that aren't much worse.
    2 Jan 2013, 10:55 AM Reply Like
  • Premium price vs premium quality I think is the issue. Not that the Skullcandy headphones are particularly bad, but a lot of the sales promotion has been based on style and faddishness vs real audio quality. The problem with that business model is that fads can change rapidly. I don't think the Skullcandy headphones are near as overpriced as the Bose, but it may have to change it's marketing to get back share.
    2 Jan 2013, 11:20 AM Reply Like
  • Comparing SKUL to Bose is like comparing gold to silver. I paid over $500 for a Bose Wave Radio several years ago and I never use it. I paid $60 for a similar Skullcandy Vandal which I use everyday because it also charges my phone. I travel with a smaller dock, the Pipe. The Bose system sound is undoubtedly superior, but for price and function SKUL wins. If you have an old, unused iphone sitting in a drawer you can bring it back to life with a Skullcandy dock. As far as the headphones go, if you spend $5 you should expect them to be the lower end of the market. It's not fair to compare them to studio quality headphones. The company also makes higher-end headphones that are superior to anything that ships with a smartphone. SKUL products are extremely popular in the ski and snowboard community. Everybody on the mountain has a SKUL audio system in their helmet.
    4 Feb 2013, 11:37 AM Reply Like
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