So if you guys are so against it, why haven't you created a petition or written Fender to address concerns with this move?
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Fender hits wall street
- Thread starter Etienned
- Start date
Fender has a very nice balance sheet, is profitable selling luxury items in a down economy and generates adequate cash flow to support its operations. Its debt structure appears to be very conservative. In general, I would say Fender is performing very well, especially for a global manufacturer.
I'm not sure where this idea of a high debt load and bail out comes from. Is it the large numbers that scare people, media Wall Street hype or ignorance?
I'm not sure where this idea of a high debt load and bail out comes from. Is it the large numbers that scare people, media Wall Street hype or ignorance?
True enough. However, that flies in the face of the commonly accepted among certain factions myth that Big Business always equals Bad, so I doubt your statement will find much support among the "sheep".
I personally think it will be a good thing for all concerned; we'll see what happens...
BIGEJ2 said:
It is so refreshing to read a non-hype post from someone with a level head and a modicum of business sense. Thanks for posting.
Corporate finance is my thing. This is the first thread I subscribed too in a long time.
The news is only a culmination of many trends that have transpired over the past few (10?) years or so.
1) What's noticed - Fender upper-crust gear and CS gear was getting harder to sell - but that can blamed on a dying economy. What to do? What to do?
2) As a stop-gap idea -Fender pumps up a lower cost guitar line - Squier - to keep the hot and cold running secretaries in the upper suites by generating fast cash revenues.
3) Just temporarily - Let's lay off or fire the lower people and especially the ones near retirement and a Timex watch from the assembly lines - keep the decent artisans and whatever luthiers they actually have for the next wave of sales - if it ever comes.
4) Hey! What about this idea? Let's build more lines of Squiers and introduce new, lower dollar point guitars (Black Tops, Pawn Shop Specials, etc.) to assuage the CS wannabees.
5) Let's get some new blood interested in buying the low-line stuff by getting teeny-bopper names to endorse - and Hey! This is even better --- let's get them to machine AUTOGRAPH the guitars too! How about some bats and skulls too!
6) Try something really crazy now - Offer to build whatever one wants at the Skunk Works in Corona California as a last ditch effort. The orders should be cramming the order desk - but they don't appear to be.
7) Go public with IPOs and stock to dab some paint on the Titanic.
As much as I love Fender - I think I got here and bought what I did at the perfect time. I don't think Fender will survive as they are.
1) What's noticed - Fender upper-crust gear and CS gear was getting harder to sell - but that can blamed on a dying economy. What to do? What to do?
2) As a stop-gap idea -Fender pumps up a lower cost guitar line - Squier - to keep the hot and cold running secretaries in the upper suites by generating fast cash revenues.
3) Just temporarily - Let's lay off or fire the lower people and especially the ones near retirement and a Timex watch from the assembly lines - keep the decent artisans and whatever luthiers they actually have for the next wave of sales - if it ever comes.
4) Hey! What about this idea? Let's build more lines of Squiers and introduce new, lower dollar point guitars (Black Tops, Pawn Shop Specials, etc.) to assuage the CS wannabees.
5) Let's get some new blood interested in buying the low-line stuff by getting teeny-bopper names to endorse - and Hey! This is even better --- let's get them to machine AUTOGRAPH the guitars too! How about some bats and skulls too!
6) Try something really crazy now - Offer to build whatever one wants at the Skunk Works in Corona California as a last ditch effort. The orders should be cramming the order desk - but they don't appear to be.
7) Go public with IPOs and stock to dab some paint on the Titanic.
As much as I love Fender - I think I got here and bought what I did at the perfect time. I don't think Fender will survive as they are.
I actually work with options at a financial firm, and instead of purchasing the stock, people buy the option as they can partake in movements of the stock putting up less money.
As far as the careless reference....I understand people's biases about Wall Street. Certian reforms are needed, but much of it is overblown. Much of that bias is from the media and not grounded in fact. What they say is totally false at times.
If you are a director of a company you can't simply dump stock. There's no way Fender can issue stock to raise money, then dump the shares before earnings. Their shares are restricted on how many and when they can sell and recorded when they sell. You can look up just like everyone else if the head honchos are selling, which usually will drive the price down.
BIGEJ2 said:
250-odd million isn't pocket change so its not entirely uncalled to suggest some problems
It was just 6 or 7 years ago they were in the news for being 50 million in debt, wasn't it?
It doesn't quite spell the end for Fender but more changes could be on the horizon
It actually really is just pocket change. To put it into perspective, HP has over $30 billion in debt on its balance sheet, Microsoft has over $13 billion and Lockheed Martin has $6.5 billion. I don't think anyone here would question the viability of any of these entities.
