Skullcandy shares slide on downgrade
SAN FRANCISCO (MarketWatch) — Skullcandy Inc. was one of the few stocks to miss out on the strong rally Wednesday morning when the headphone maker’s shares fell more than 10% to .94 after Jefferies & Co. downgraded the shares to underperform from buy. In a note to clients, analyst Randal Konik said he has become “increasingly concerned about promotional pressures and rising competition in the headphone market.” He noted that the in-ear segment that comprises more than 60% of Skullcandy’s total revenues is “under significant pressure from a variety of competitors, and we believe this trend will likely continue in coming quarters.” The higher-end on-ear and over-ear segments are growth categories “that inherently carry lower margins,” he added.
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