Skullcandy Inc (SKUL) Soars as Founder Ponders Buyout

Skullcandy Inc (SKUL) founder Rick Alden may take the company private

by Alex Eppstein

Published on Jun 8, 2016 at 10:18 AM
Updated on Jun 8, 2016 at 12:06 PM

Headphone maker Skullcandy Inc (NASDAQ:SKUL) is burning up the charts, after Ptarmagin LLC disclosed a 12.7% stake in the company. What's more, in a regulatory filing, founder Rick Alden revealed potential plans to take SKUL private. At last check, the stock has soared 16% to trade at $4.56 -- its highest level since early January.

Going private has been a trend of late, as Fortune magazine highlights in its June issue. In fact, high-profile financial firm LendingClub Corp (NYSE:LC) is reportedly in talks to go private -- sending the stock sharply higher, much like SKUL -- while Polycom Inc (NASDAQ:PLCM) has already fielded two bids.

As for SKUL, today's upward gap may be crushing the hopes of short sellers. Short interest on the stock spiked over 16% during the most recent reporting period, and now represents 6.3% of its float. At SKUL's average trading volumes, it would take 7.5 sessions to cover these bearish bets.

On the other hand, the brokerage bunch is being vindicated. All three analysts tracking Skullcandy Inc (NASDAQ:SKUL) have handed it a "strong buy" endorsement. This positivity looked foolish at last night's close -- with the stock down nearly 17% year-to-date -- but SKUL is now just a chip-shot from getting back into the black.

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