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.
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“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.