Shares of headphone maker Skullcandy rose sharply on Wednesday after founder Richard Alden disclosed in a regulatory filing that he is exploring taking the company private. The stock rallied 22 percent in pre-market trading, but has since settled down to roughly 16 percent at $4.57, its highest level since January.
Alden’s family trust (Ptarmigan) holds a 12.7 percent stake in the Park City, UT-based company. The Wall Street Journal reports that representative for Alden informed the company of the potential takeover effort on Monday.
“According to the 13D filed by Ptarmigan, Mr. Alden intends to explore potential transactions under which he may make a proposal to Skullcandy for a potential transaction to purchase all of the shares of Skullcandy,” a rep for the company said in a statement to Billboard. “Our Board will evaluate his or any proposals made to the company that may enhance shareholder value.”
Skullcandy’s stock (NASDAQ:SKUL) has experienced big swings in the last year; its 52-week high is $8.27 and the 52-week low is $2.75. It closed Tuesday at $3.93. The three analysts keeping tabs on Skullcandy have all ranked its stock as “Buy.”
“Given the recent selloff in shares of [Skullcandy], and subsequent sharp discount multiple on the stock, such a transaction could indeed look attractive,” wrote Wunderlich Securities analyst Rommel Dionisio in a note to clients, adding that he believes the potential takeout value of the stock would be in the $5.50-$6.50 range.
Skullcandy went public in July 2011. It markets headphones, earphones, hands free devices, and other audio accessories.
Updated, 1:20 p.m. ET: This article has been amended to include a statement from Skullcandy.