Fender sets plan to go public (IPO)

BigJay · **Joined:** Sat Feb 26, 2011 11:48 am **Posts:** 65

Thought you guitar nut jobs would like to read this.....

http://www.bloomberg.com/news/2012-07-0 ... rseas.html

Miami Mike · **Posted:** Mon Jul 09, 2012 7:55 am

Interesting...

Retroverbial · **Posted:** Mon Jul 09, 2012 8:04 am

You can pretty much bet yerass that not one of the major shareholders selected to sit on the board of directors will know the first thing about Fender guitars and amps or the musical instrument industry in general

:roll:

Arjay

TEXASBLUEZMAN · **Posted:** Mon Jul 09, 2012 8:54 am

And, if the value of our USA made equipment does in fact increase in value. Then theft will increase also!

All of this "expanding" is a precursor for moving most production overseas. We'll only be left with Custom Shop models that will start at $4000.

New label-"Assembled in China-with USA parts"

But how many of those parts are actually "built" in the US? I personally don't feel a difference in MIA or MIM on most models.

TEXASBLUEZMAN · **Posted:** Mon Jul 09, 2012 9:11 am

I haven't played or looked at any new guitars in a while. Didn't know they had those labels already. I don't get out to the music stores much. Thank God. My wallet is thin enough already.

I imagine in about 10 yrs, the US will not be the superpower it is now. China will reign supreme. I hope not, but it would not surprise me.

mhowell · **Joined:** Wed May 25, 2011 12:45 pm **Posts:** 1169

Retroverbial wrote:

You can pretty much bet yerass that not one of the major shareholders selected to sit on the board of directors will know the first thing about Fender guitars and amps or the musical instrument industry in general

:roll:

Arjay

I suspect there'll be some current Fender execs on the board. Things will be OK for a few years, maybe even better with the fresh cash infusion, but eventually your prediction will pan out.

Corporations are strictly business and if there's more money in starcasters than in USA stratocasters guess which one bites the dust.

BigJay · **Joined:** Sat Feb 26, 2011 11:48 am **Posts:** 65

Actually, the Board has a surprisingly high number of Guitar Center executives.

63supro · **Joined:** Tue Aug 07, 2007 2:19 pm **Posts:** 8827

BigJay wrote:

Actually, the Board has a surprisingly high number of Guitar Center executives.

Doesn't mean they actually play guitar. :shock:

Nah, I have a funny feeling, they'll move a lot more of their production overseas.
Emerging markets in China and India? :lol:

Hang on to to the stuff you have now even the Mexican stuff.
Say what you will about the 70's Strats and Tele's, but at least they were all built here. :wink:

This IPO is nothing more than a Fender fund raiser....or dare I say a bailout?

BigJay · **Joined:** Sat Feb 26, 2011 11:48 am **Posts:** 65

I could be wrong, but Im under the impression that few Fender guitar components are currently actually made in the USA. The exceptions, I believe are some necks and bodies, particularly Custom Shop.

BigJay · **Joined:** Sat Feb 26, 2011 11:48 am **Posts:** 65

Many people believe that going public will cause Fender to evolve into some type of cheap junk manufacturer. This is naive. Being publicly traded has nothing to do with the quality of the product.

What affects the quality of the product is operating profit. In other words, Fender, like any other for-profit manufacturer, is motivated to sell the products that generate the most profit. To follow, if the Company believes it can generate the most profit by selling fewer Custom Shop instruments, potentially produced in Corona, they will invest in Corona facilities. Conversely, if they believe they will earn more profit by selling more low-end instruments in China, they will do that.

63supro · **Joined:** Tue Aug 07, 2007 2:19 pm **Posts:** 8827

They're having a hard time with quality now. Just the mention of emerging markets in China and India makes me chuckle. I believe they already sell and manufacture in both countries. I'll take my fifteen bucks and buy a few local beers from small brewers. :lol:

BigJay · **Joined:** Sat Feb 26, 2011 11:48 am **Posts:** 65

63supro wrote:

They're having a hard time with quality now. Just the mention of emerging markets in China and India makes me chuckle. I believe they already sell and manufacture in both countries. I'll take my fifteen bucks and buy a few local beers from small brewers. :lol:

Of course they do. I'd be surprised if the majority of FMCs unit volume isn't outside the US. The extension of the "operating profit" motivation is to estimate the proper blend of products, price points and geographic distribution to both maximize operating profit and mitigate risks to those cash flows.

And for the record, Im not advocating or defending. Im simply describing how it "is".

Obviously, if quality and "Made in the USA" were the most important element of Fenders business, they wouldn't sell anything but Custom Shop, which the vast majority of guitarists can't afford.

RCB-CA-USA · **Joined:** Mon Apr 27, 2009 1:31 am **Posts:** 1281

...it's a simple equation. There will be more mouths to feed and more debt to pay so there will be less left over for manufacturing unless...quality is sacrificed and the staff takes a huge pay-cut to pay for the corporate board and additional debt. Natural resources are finite. Fender maximized production and profit a long time ago. Fender is international. A glimpse of things to come is how Squier got the basswood treatment, Fender guitars got the koto wood treatment, and the VG strat is out-dated junk tossed off to Roland. ...I'm about to purchase another guitar and it don't look like it will be a new Squier, Fender, nor VG strat.

Retroverbial · **Posted:** Tue Jul 10, 2012 7:06 am

Violin Parent wrote:

Know this: private companies like Fender (private but very big, international, mature, no room for growth, we're in a Great Recession) go public for one reason and one reason only: they are in a VERY REAL danger of GOING UNDER completely, bankruptcy, kaput.

You shouldn't have let this "cat" out of the bag.

As they say, "Ignorance is bliss".

:mrgreen:

Arjay

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