Why Are Skullcandy Shares Sinking?

Skullcandy Inc (NASDAQ:SKUL), a maker of audio headphones, has been having a rough day in the markets on Friday, with shares declining 22 percent, reaching a new low value for the company.

The battering that the stock is taking is due to a couple of intertwined factors. The company warned that it would likely incur losses during the first quarter, that it was encountering challenges and sales will decline for the year. Additionally, CEO Jeremy Andrus stepped down unexpectedly, leaving founder and previous CEO Rick Alden to step in while the firm searches for a replacement. Combined, the overall health of the company caused brokers to downgrade Skullcandy’s stock, which in turn spurred its loss of value in the market.

Although the drop in value is a sharp stab, it is only the latest in a string of downward spiraling succession that has seen the value of the company drop by 55 percent over the last 12 months…