Shares of Nautilus, Inc. (NYSE: NLS) have staged an impressive comeback today. After closing yesterday at $6.30, shares sank as low as $5.36 in trading this morning, their lowest point since 1999. But the stock rebounded as high as $7.12 in the afternoon.

A pretty ambivalent reaction to the terrible earnings the company released yesterday afternoon, wouldn't you say? Sales plunged 16% for the third quarter, and the company lost 42 cents per share compared with earnings 9 cents (before a tax reversal that increased the gain to 29 cents) in the prior year quarter.

CEO Robert Falcone, who was elevated to the position in August commented that "We are very disappointed by Nautilus' third quarter financial results. Our shareholders can be certain that we are implementing the changes necessary to address these shortfalls in order to drive sustainable growth and value."

With stock badly beaten down, it may be time for investors to take a look at the company. Sherborne Investors owns 23.5% of the company, and is locked in a battle for control of the board as it seeks to unlock value for shareholders. Robert Falcone doesn't like them too much, telling The Oregonian that "In my opinion, they're slash-and-burn people, and they would try to get the stock up for the short term without giving any regard to long-term benefit. That's not the way of running a company... They don't really know anything about the company as far as we've heard. What are they going to tell the people that have been here for years?"

Of course, looking at Nautilus' results over the past few years, I would argue that the company's management doesn't know much about running a company either -- unless by running a company you mean paying yourself a lot of money while shareholders lose millions.

Still, the big decline and strength of brands like Bowflex and Nautilus could make this a stock worth keeping an eye on, especially with Sherborne keeping an eye on things, looking out for the interests of outside investors.

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