Fender IPO planned - stagnation predicted

[bagman67]

http://beta.fool.com/gibbstom13/2012/07/13/will-fender-investment-strum-positive-chord-your-p/7051/?source=TheMotleyFool

Enjoy.

 

[Cagey]

Interesting. Profit/Performance is not good enough to attract a raider/sugar daddy, so we'll do the IPO thing and see if enough people are impressed with the name to take a taste and make a killing on the volume? And what the hell are they doing $247M in debt? Calls for a management sweep, and we all know what happens to musical instrument companies when they go down that road, and nobody more so than Fender.

Somebody just wants out. Handwriting's on the wall. Time to move to the Bahamas and relax on the yacht with nekkid women and umbrella drinks. Too many players in the game now that are all doing from reasonable to great jobs, so there's no easy money any more.

 

[mayfly]

I agree with cagey. Trading debt for equity is not a good long term move. It's a short term strategy for exit.

Don't buy it. If warmoth wanted to sell however...

 

[Jumble Jumble]

It might be nice to own a tiny piece of Fender though. I'd be tempted to get a couple for purely sentimental reasons.

 

[Cagey]

If you're going to make investments based on sentimental reasons, you may as well just crumple up hundred dollar bills and throw them in the fireplace. It's a less painful way to lose money, and at least you'll get some heat out of the deal.

 

[jackthehack]

ANY company that quotes EBITDA/OBITDA numbers instead of Profits/PE ratios and uses non-GAAP accounting should be avoided like the plague.

On the other hand, I might buy 10 shares for the sole purpose of attending/starting sh*t at the annual shareholders meeting...

 

[JCizzle]

If you're going to make investments based on sentimental reasons, you may as well just crumple up hundred dollar bills and throw them in the fireplace. It's a less painful way to lose money, and at least you'll get some heat out of the deal.

Tell us how you really feel, Cagey.  :laughing3:

 

[Cagey]

Hehe! Well? It's true. Although JackTheHack's idea has merit. Get some shares, you can attend meetings. Probably still lose money, but there's the entertainment value to consider.

 

[jackthehack]

Ten shares would only be $130-150, well worth the price of admission to the shareholder's meeting to ask awkward questions...

 

[jackthehack]

This just in: Guitar manufacturer Fender cancelled its IPO after its stock was deemed overvalued by some investors.

http://finance.fortune.cnn.com/2012/07/20/why-fender-pulled-its-ipo/?iid=HP_LN

 

[Cagey]

Ok... show of hands... who didn't see that coming?

 

[jackthehack]

What that actually means is they couldn't find any institutional investors that would touch the stock at that strike price given their debt load/revenue growth prospects....

 

[mayfly]

What that actually means is they couldn't find any institutional investors that would touch the stock at that strike price given their debt load/revenue growth prospects....

Yep that's exactly what that means. That's a terrible dept ratio.

Chapter 11. Sad- id rather see it happen to Gibson.