Is Skullcandy Headed for Bust?

Is Skullcandy Headed for Bust?

The end of 2012 and the start of 2013 has been a real roller coaster ride for the Park City-based audio company as nearly 60% of total shares in the market were sold short in recent months. Talks of takeovers and mergers have made the public curious about what is really happening in the company. Are there some short circuits in the capital structure? 

The company's credit rating was downgraded again recently, giving the company a default likelihood of 0.12445%, a percentage we haven't seen in nearly a year. The company won't be considered a high-yield stock until it hits a default likelihood of  0.30% but that number is getting way too close for comfort. 

I was able to generate a couple reports to look at (thanks to Bloomberg) so you can see what the company is looking like on paper. The numbers haven't changed much as the WACC (the cost of keeping the firm running) is sitting around 10.5% but keep in mind that this a still a ROUGH APPROXIMATION. 

The following report shows where the company has been at for the past year, who holds how much of Skullcandy shares, the earnings the company has generated over the year, etc. 

In an article published on the 16th of January, CEO Jeremy Andrus said that he has no intentions of selling the company and is very headstrong regarding the direction of the company. Skullcandy has 70,000 Twitter followers and 2 million Facebook fans. So where is the company really headed? 

I want to hear what you think about the company and where it's headed. Can you smell a buyout of the company? Or do you see a big comeback in the near future?