So Fender’s not going public after all.

And we were all so excited!
But now, no more headlines like this:

Fender reports higher sales, lower profits
http://www.marketwatch.com/story/fender-reports-higher-sales-lower-profits-2012-05-10

The highlight of this article?

Fender, which has filed to go public on the Nasdaq at some point this year, saw its net sales rise 2.2% to $174 million in the first quarter, and its net income decline 73% to $1.9 million in the first quarter.

Wow.

That can’t possibly be right, can it?  And if it was, why would anyone (at least anyone who cares about money, which is pretty common among the investor class) invest in them?

But then you can also find data like this:

The above numbers are from Fenders own prospectus, so they’d better look good.  But still, look at that bottom line there.  Granted, the economy has been weird, but their net profit/loss is all over the place!  I have to say, if I was someone who cared about money I would not put it in a company that only shows a profit every other year.  And if I was someone who was thinking of selling bits of their company out to investors and then being beholden to those investors (an idea that scares the bejesus out of me) I would not think that those numbers would make me look in any way attractive.

There is a great story here about the whole thing:

http://finance.fortune.cnn.com/2012/07/20/why-fender-pulled-its-ipo/?hpt=hp_c4

The CNN article points out the Guitar Center connection, which is another company not doing so well these days

Guitar Center Opens Two Stores Despite Debt Downgrade 
http://digitaleditions.sheridan.com/display_article.php?id=1010001

Guitar Center Debt Downgraded, Capital Structure “Unsustainable”

Y’know one thing that might make it unsustainable?  Well, I’d guess one reason is because they owe Fender, what was that number eleven million dollars??? And maybe that is why Fender wanted to raise a little money, get some cash coming in from some place else, sell off a little stock, get things rolling again. But now it’s not happening.

I think it’s probably better this way. (Maybe not for Guitar Center, but that’s a whole other story) Sure, on some level we are a competitor of Fender, but honestly, I would not like to see them driven down a path of quarterly-profit fueled suckiness.  They have an awesome brand, they have the best players, a great history, it would be a shame to throw that all away to make the investors happy. It may be a rough few years ahead for them (welcome to the club) but in the end I hope it turns out that Fender stays with us with the intent of making great guitars instead of making great profits.

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