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Ruh Roh Skullcandy...

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562056961108
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http://finance.yahoo.com/news/skullcandy-says-cfo-mitch-edwards-224630765.html

PARK CITY, Utah (AP) -- Skullcandy Inc. said Monday that Chief Financial Officer and General Counsel Mitch Edwards is resigning to pursue other activities, including charitable and humanitarian work.

The company sells fancy headphones, decorative iPod cases and T-shirts emblazoned with its skull logo. Skullcandy said Edwards will leave the company on April 1 and may consult for the company while it looks for a new CFO. Vice President of Finance Ron Ross will be its principal accounting officer until a new CFO is hired.

Shares of Skullcandy dropped $1.15, or 7.8 percent, to $13.68 in aftermarket trading following the announcement.

_________


CFO's don't just resign without warning... this smells like unethical activity or a management conflict. Would hate to see Skullcandy (founded by a bunch of skiers and snowboarders) crash and burn because of something illegal or unethical. I'll post developments here as they become available.

Mar 5 2012 6:07PM
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Dr.Gonzo
Posts: 2552 - Karma: 87
ok, sounds good. it isnt always the CFO that makes the difference, sometimes people just react and stocks drop
Mar 5 2012 6:09PM
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mike_d
Posts: 503 - Karma: 79
Maybe he felt bad about the fact that they sell really colorful garbage for way too high of prices.

Skullcandy: Looks cool. Sounds like shit and falls apart.
Mar 5 2012 6:11PM
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562056961108
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Nice Icon :)

Product quality is an issue, for sure, but they seem to be doing well financially... If they had a replacement right away this wouldn't be a big deal. The fact that they don't have someone stepping in to fill his shoes immediately and have hired legal counsel to hire someone new smells fishy to me.

The stock is tanking and will continue to do so tomorrow in all liklihood. From their 8-K.

in connection with his departure, Mr. Edwards and the Company entered into a separation agreement (the "Separation Agreement") pursuant to which Mr. Edwards will receive: (i) a payment equal to six months base salary, (ii) continued healthcare coverage for Mr. Edwards and his dependents for a period of six months following his resignation, (iii) accelerated vesting of stock options that otherwise would have vested during the six months following the date of Mr. Edward's resignation and (iv) six monthly payments of Company matching 401(k) contributions to Mr. Edwards 401(k) account. The foregoing description of the Separation Agreement is a summary only and is qualified in its entirety by reference to the full text of the Separation Agreement which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

Here's why the above matters: Edwards wouldn't resign immediately and take a big hit on his stock options ( a big part of his compensation ) without a really good reason... such as my reasons listed in my first post.
Mar 5 2012 6:26PM
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562056961108
Posts: 0 - Karma: 575
Nice Icon :)

Product quality is an issue, for sure, but they seem to be doing well financially... If they had a replacement right away this wouldn't be a big deal. The fact that they don't have someone stepping in to fill his shoes immediately and have hired legal counsel to hire someone new smells fishy to me.

The stock is tanking and will continue to do so tomorrow in all liklihood. From their 8-K.

in connection with his departure, Mr. Edwards and the Company entered into a separation agreement (the "Separation Agreement") pursuant to which Mr. Edwards will receive: (i) a payment equal to six months base salary, (ii) continued healthcare coverage for Mr. Edwards and his dependents for a period of six months following his resignation, (iii) accelerated vesting of stock options that otherwise would have vested during the six months following the date of Mr. Edward's resignation and (iv) six monthly payments of Company matching 401(k) contributions to Mr. Edwards 401(k) account. The foregoing description of the Separation Agreement is a summary only and is qualified in its entirety by reference to the full text of the Separation Agreement which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

Here's why the above matters: Edwards wouldn't resign immediately and take a big hit on his stock options ( a big part of his compensation ) without a really good reason... such as my reasons listed in my first post.
Mar 5 2012 6:26PM
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benyannelli
Posts: 773 - Karma: 562
time to short-sell their stock in the newschoolers stock game...
Mar 5 2012 6:50PM
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562056961108
Posts: 0 - Karma: 575
That would be correct good sir! a naked put option might be worth it as well...
Mar 5 2012 6:54PM
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wreck.yoself
Posts: 656 - Karma: 46
Idk why people bash them so much, ive had some problems with skullcandy but I didnt care cuz im not dumb enough to spend more than 40 bucks on headphones anyway
Mar 5 2012 11:16PM
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Shifties4Dayz
Posts: 1657 - Karma: 553
this.
Mar 6 2012 10:48AM
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Galaga
Posts: 409 - Karma: 15

Ive never really liked Skull Candy at all. Broke two pairs of hesh headphones, the icon2soft are alright I guess, and their earbuds hurt my ears like hell. But to see a company made by skiers and snowboarders crash and burn after 9 years of sucsess would be heartbreaking, hopefully they will pull it together.

Mar 6 2012 12:17PM
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mackcamp
Posts: 1209 - Karma: 264
I wouldn't mind seeing this shitty excuse for a company, with all their "quality products" go down the drain. 

Ugly headphones, overpriced, break or just start to fall apart after a week., and their warranty process is a fucking JOKE.


Any other NS'ers wanna send Skullcandy a box full of their broken products?

/Rant.
Mar 6 2012 12:22PM
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Ribss.
Posts: 3442 - Karma: 3,344
I have been skiing with one pair of Icon2softs for 3 seasons and nothing has gone wrong. Fuck all of you hating on skullcandy, not every single product they make is low quality.
Mar 6 2012 4:43PM
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malonius_funk
Posts: 2249 - Karma: 1,500
i think a lot of their products are low quality, but i also think that a lot of the people who buy their products break them really easily, just as they would with a pair of sunglasses or a cell phone. i have a pair of icons and they aren't the greatest sound quality but i'm careful with mine and i haven't broken them yet.
Mar 6 2012 4:48PM
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Brenone
Posts: 4944 - Karma: 296
Im sure if the CFO and General Counsel were leaving or being pushed out because they did something unethical/illegal the announcement wouldnt of gone so far as to say they are pursuing charitable ventures. There is also news floating around that Skullcandy is going to start shifting their focus to creating higher quality products so maybe this is part of a company shake up?
Also the guy who started it is a skier/boarder but he is a business man and entrepreneur first. And a succesful one at that.
Mar 6 2012 4:55PM
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I_liketobutter
Posts: 2664 - Karma: 997
ive got 60+ days skiing w my reg icons w no issues
i've gone through two pairs of buds for working out/random listening in the past 5 years.

for the price, i could care less if they break after that much use.

the problem i've found w headphones of any kind is that anything under $50 is more or less the same. the next step up is the $100+ level. at this level, i'd never use them for anything besides listening at my comp/on a bus/etc, never for skiing. so all u kids complaining about the quality of $15-$30 headphones that break when u stuff them in and out of your backpack and get pulled at/crushed when u eat shit skiing need to use some common sense.
Mar 6 2012 4:59PM
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TheBlueMtSkier
Posts: 909 - Karma: 42
.
Mar 6 2012 5:08PM
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fruitstick
Posts: 594 - Karma: 1,034
omg your so right

Skullcandy always fucking breaks every second day someone In school is complaing about there fucking skullcandys being shit
Mar 6 2012 5:27PM
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*spike*
Posts: 538 - Karma: 65
haha yeah ive broken mine to many times to recall!
Mar 6 2012 6:14PM
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250r
Posts: 2276 - Karma: 1,013
did not read thead but i must say, people who think skullcandys are good headphones have obviously never heard a pair of real headphones, your really not any better off with skullcandys than you are with a pair of ipod earbuds...theres so many better headphones out there for so much less money. Dont even get me started on beats by dre either....
Mar 6 2012 6:25PM
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colleenator
Posts: 885 - Karma: 60
my skullcandy ear buds are shit. they werent expensive so its not a big deal and i basically bought them because of the hype. lesson learned, saving up for beats by dre.
Mar 6 2012 6:30PM
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wreck.yoself
Posts: 656 - Karma: 46
not worth the money, don't bother
Mar 6 2012 6:34PM
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colleenator
Posts: 885 - Karma: 60
id get the ear muff ones not the buds. my sister has a pair and i fell in love. turn up the volume and the bass is insane. cant wait to use em at the gym.
Mar 6 2012 6:42PM
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250r
Posts: 2276 - Karma: 1,013
yea like i said before about the beats by dres, terrible terrible head phones...look up allen & heath xone xd-53, for some headphones that are substantially cheaper, and miles ahead of the beats in sound quality, comfort, durability and bass response.
Mar 6 2012 6:45PM
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colleenator
Posts: 885 - Karma: 60
aight. ill check them out. thank u :)
Mar 6 2012 6:46PM
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CheddarJack
Posts: 5203 - Karma: 7,380
This. You're paying for the name, not the quality. They are nice headphones, but they're probably twice as expensive as they need to be. Put a known symbol to endorse a product and bam! double the price.
Mar 6 2012 6:56PM
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GayWolf420
Posts: 37606 - Karma: 122,612
Beats are not much of an improvement either.
Mar 6 2012 7:02PM
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Ben.
Posts: 21463 - Karma: 683
hahahahahahaha
Mar 6 2012 7:13PM
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-KYLE-
Posts: 3390 - Karma: 603
anybody else notice his resigning day is April 1st...
Mar 6 2012 7:27PM
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malonius_funk
Posts: 2249 - Karma: 1,500
skullcandy is trolling us...
Mar 6 2012 7:30PM
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Benseleit
Posts: 357 - Karma: 159
any plastic pair of headphones that you expose to cold temperatures and movement, such as while skiing, are going to have a tendency to break. skullcandy is no shittier than the next brand when it comes to that situation
Mar 6 2012 11:54PM
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shitty
Posts: 242 - Karma: 46
I serve as an investment analyst that studies and handles client inquiries about this kind of thing regarding public companies and here's my short take on this matter...

When you see a sudden resignation like this, especially with a "boilerplate" excuse to pursue other opportunities including charitable and humanitarian work -----> it *typically* points to some degree of disagreement within the organization. In the case of the CFO leaving, this raises fears about disagreements within the company regarding accounting practices and thus brings into question the quality and reliability of a company's financial statements. You lose investors trust, well you're in the trash for a while. Such departures in the past have led to inquiries and investigations by the SEC into the nature of the departure and thus leads them to look extra closely at skullcandy's financial statements. This can, if the outcome is adverse, lead to fines, financial restatements (such as they've been previously overstating revenues or understating expenses), other enforcement action, which really will ruin the company's image and reputation for integrity.

With CFO and General Counsel Mitch Edwards - he is 52 years old and according to company filings raked in a total of $2.8 million dollars in 2010, which was more than any other executive. Is really gonna leave all that for charitable work? really? C'mon, that is rarely the actual case in these situations. He's 52 (still relatively young in the corporate exec world) and he will probably find another tech company (his past experience is in tech) and rake in millions being CFO at another firm. The one thing that doesn't point to a complete potential disaster is the fact that he is staying on until the end of the month and could then be a consultant to assist with the CFO transition...

It will probably not turn into the situation I described above, but you never know. It has happened and will happen again in the future...


Mar 7 2012 12:36AM
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AT-AT
Posts: 3281 - Karma: 3,256
Well i know what stock im selling short tm
Mar 7 2012 12:46AM
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CassiusClay
Posts: 1757 - Karma: 2
Ballsy move, and the price of the naked put (transaction, brokerage, actual price) is based on information already consumed by investors and wall street alike... it won't come cheap. Are you, huckcliffs supporting a naked put personally? Based on the information, it certainly seems like a good move, but I'd like to hear more...
Mar 7 2012 1:01AM
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Pool.
Posts: 2820 - Karma: 662
this or i have audio technica ath-m50's and they are 8======>~~~~~~~~~~~~~~~

jizz.
Mar 7 2012 3:17AM
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562056961108
Posts: 0 - Karma: 575
Well, here comes my disclaimer...

Naked puts imply you do not own the underlying security of the option, and as such, if the market price is at or above the put option strike price you bought, you lose 100% of your investment, then the put "seller" keeps all the premiums you paid for the option (all depends on the strike price, which implies the risk you took. lower x price = more risk).

However, if the put is below the strike price and you exercise the option (unlikely as an individual investor, as you would probably be able to sell this before the exercise date for a higher premium, as long as it covers transaction expense), that forces the put seller to purchase the security at the actual security price and sell it to you at the strike price (which is lower than what he bought it for) giving you a likely windfall profit. If he doesn't own the security already, he must buy it.

Loss for the put seller is not unlimited though, as maximum loss is when the stock reaches zero (still huge, but not unlimited). your receive the benefit, in the scenario, of the strike price to zero ($20 --> 0 = $20 profit, minus option premium and transaction expense)

A naked call, however, implied unlimited loss, as the stock can skyrocket as high as it wants (thereby leaving the call seller vulnerable for unlimited loss)

In this instance, I'd consider buying a naked put at a reasonable (you choose) strike price, wait for the stock to bottom out on bad news, then buy the stock before the option expires to hedge your position and maximize the benefit of upside performance.

PM me if you want to know more, options are crazy stuff. Also, props to the guy with the salomon logo with the investment advice and insight, that is spot on what I was thinking... more remains to be seen here. The above is a way to trade on it.
Mar 7 2012 11:34AM
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562056961108
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Also, exercising the put option (or selling it just before) implies you are covering the premium you paid in excess of the exercise price to make a profit... which could be large in this scenario.

Your choice of exercise price depends entirely on your appetite for risk... the lower the x, the higher the risk you are willing to take on.
Mar 7 2012 11:37AM
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