Is Gibson in real problems?

cutaway

Senior Member
Messages
18,214
this is the business equivalent of a headstock ding. i mean, yeah you can see it, and it might affect resale, but it still works fine
 

JPIndustrie

Silver Supporting Member
Messages
1,357
From what I understand from the residents' sarcastic and salty comments that area of Nashville is 'up and coming' so to say. Probably made a lot more sense to capitalize on that property value jump.

Because really, its the whole guitar industry in trouble... :):(:cool:
 

Jonny G

Member
Messages
1,513
Ummmm. 8.5x debt is a problem. Very understandable why they may be selling that property since they have significant debt repayments due - far in excess of their cash generation on current form. 2015 guitars clearly got hammered which must have hurt margins and put them into serious junk territory (Caa1 is frankly just one step up from "expected to default"). If the 2016 line does better, (which seems to be the case), if they sell the property for a good price and if they can make the electronics acquisitions work (that one is a really big "if" - I was surprised to see that guitars are now only a small part of their turnover and theyve gone so big into consumer electronics - a pretty unattractive sector to be in) then they may dodge the bullet, but it'll be close.

Watch this space.

p.s. I am a finance guy and so, contrary to standard TGP operating procedure, do actually know what im talking about on this one. :hide2
 

stratplexi

Silver Supporting Member
Messages
1,134
Yes, this is a real problem. The cost of capital just went up for Gibson. It sounds like they are over leveraged as a result of acquisitions and 2015 really hurt them.
 

carlosmucho

Member
Messages
239
Thanks for linking those articles, they were eye-opening to me. I found it interesting that Gibson's annual revenues are 1.7 Billion now, compared to just 300 million in 2010, thanks to acquisitions of electronics companies. Wow.
 

peskypesky

Member
Messages
5,618
Thanks for linking those articles, they were eye-opening to me. I found it interesting that Gibson's annual revenues are 1.7 Billion now, compared to just 300 million in 2010, thanks to acquisitions of electronics companies. Wow.
That's revenue. But what was the net income, if any?
 




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