Maker of iPod headphones goes public

Skullcandy headphones from the 2010 product line.

Kai Ryssdal: We had some fun yesterday with the Zillow IPO. The real estate website went public today to the tune of a 79 percent jump in its share price.

Another trendy firm went public today, but investors do seem a little more leery. I can't for the life of me imagine why. Doesn't a company named "Skullcandy" sound like a safe investment to you?

Marketplace's Jeff Horwich reports.

Jeff Horwich: Never heard of Skullcandy? That's OK, I wasn't cool enough, either. Basically, it sells headphones -- get it, "Skull Candy?" Headphones designed to make other people's heads turn -- endorsed by rappers, snowboarders and motocross star Nick Wey, whom I've also never heard of.

Nick Wey: Ah, my favorite Skullcandy headphones? I mean, kind of going with my whole persona, I'm little bit more of a GQ type.

In case you missed it, these days we care a great deal about what headphones our celebrities wear. And we have Skullcandy to thank for it.

Jeff Harbaugh: They led the way into that niche -- not so much from a technology point of view, but from a point of view of being trendy and fashionable.

Jeff Harbaugh is the former president of Nitro Snowboards, now a financial adviser for the so-called "action sports" industry.

Harbaugh: They've been able to grow the market and they're kind of betting on staying trendy even as they sell in the big-box stores, like Best Buy.

Today's IPO values the company at more than $500 million. Freddy Nager talks about Skullcandy with his marketing students at UCLA. Nager says Skullcandy has done a masterful job dressing up decent Chinese headphones. Unfortunately, other people can do that, too.

Freddy Nager: So now any celebrity who considers himself or herself a brand can call up a Chinese factory and say, 'hey I want my name on a product.' It really does pose a huge burden on Skullcandy to always be even edgier-than-thou.

Nager says he's got a new assignment for his class: design a pair of headphones that's cooler than Skullcandy. For mega-brands like Nike and Sony, you can bet that assignment's well underway.

I'm Jeff Horwich for Marketplace.

About the author

Jeff Horwich is the interim host of Marketplace Morning Report and a sometime-Marketplace reporter.


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