Fender, Guitar Center & the tie that Binds them very close together

[Lee Harvey]

http://www.scpr.org/blogs/economy/20...ity-loves-gui/

A nice article on Fenders IPO.. Talk about cheep. it's cheaper than Facebooks IPO..

And how Guitar Center and Fender are very cuddlie in bed together..

[dan1952]

Putiing all your eggs in one basket...

[Lee Harvey]

Yep...

Doesn't turn out well when you do either.

[Lee Harvey]

It also seems at 13 dollars a share Fender is not going to be able to pay off it's debts..

[mohair_chair]

Originally Posted by Lee Harvey

It also seems at 13 dollars a share Fender is not going to be able to pay off it's debts..

Fender was only planning on paying off about $100 million of debt, so it should have no problem doing that.

[Lee Harvey]

Ahhh..

Still makes no sense to me. If your are in debt you are not making a profit and cannot stay in business for too long.

[Bones]

It's odd when you consider that the closest two GCs to me never have any telecasters in stock.

[Lee Harvey]

That is odd.

The ones near me have more Fenders than any other brand of guitar.

[chrisgblues]

Originally Posted by Lee Harvey

If your are in debt you are not making a profit and cannot stay in business for too long.

That's not necessarily true. Many businesses have been in debt due to expansion or investment (i.e. to build a new warehouse, or acquire another company) yet they still turn a tidy profit each year. That profit goes toward paying down their debt, typically this is done in a 3-5 year business plan.

Think of it like a person who has maxed out their credit card and has no savings...yet that person still has a good paying job with the ability to pay off the credit card in a few years, make sense?

As long as the business shows a profitable income statement, that shows they have the ability to eventually pay down their debt. The real question here is, does Fender have a profitable business plan? If so, then investment would be wise because once they pay down their debt and start pocketing the net income, the stock value should rise. If not, then the investors would just buy them some time until they eventually sink themselves.

I don't have a crystal ball, and for this reason, I don't invest.

JMHO.

[Lee Harvey]

It does make sense..

Thanks for that..

That is a question I can't answer, if Fender has a profitable business plan.