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America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

nytimes.com

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Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#51

Post by duxup »

vorpalhex wrote: post #2

This is not an uncommon story for firearm manufacturers unfortunately. Tooling costs are high, sales hard to predict, and designs can fail easily. Ian McCollum of Forgotten Weapons has done a lot of videos on this topic.

It feels like the sales are hard to predict have something to do with guns in the US being ... almost borderline fashion items in terms of how people decide things.

Like there's a lot of discussion about usage and practicality among gun enthusiasts, but when they buy their 3rd or 6th gun ... I suspect the decisions are more about difficult to predict things and whims.

It is a strange market.

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#52

Post by Junk_Collector »

jcranmer wrote: post #35
brightball wrote: post #25

Earlier quoted context omitted.

Do you mean the percentage of owners? I can count on one hand the number of people I know who own a home but don't own a firearm.

I did mean the percentage, but it does look like the absolute number of households owning guns has very slightly declined.

I imagine it's difficult to get good numbers on ownership though as the cross section of people who would not disclose firearm ownership to the government or polling agency would also be likely to own a firearm. This is compounded by the fact that firearms last upwards of 100 years with minimal maintenance and there are healthy secondary and black markets for them.

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#53

Post by radiator »

rtpg wrote: post #33
kevin_b_er wrote: post #16

Not a mystery: Private equity firm bought them out with borrowed money, raided their resources to enrich themselves, then left Remington to rot. It is a common story now. The private equity firm makes a bunch of money and people are jobless.

I get that money is money, but I feel like we desperately need to make conflict of interests prosecutable, so we can kill the self-serving mess that are LBOs. In what universe is "I borrow a bunch of money, buy a company, then force the company to basically borrow money from me" a value-creating operation? Cuz it sure isn't this one.

Interesting ... "money is money". But what exactly is fiat currency? Some would say it is not really money.

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#54

Post by kgwgk »

refurb wrote: post #26
bluejekyll wrote: post #20

Earlier quoted context omitted.

I’ve read about this scenario many times, but I’m curious about why any creditor would lend money to a company that’s poised to do this. Wouldn’t these private equity firms lose the ability to borrow money based on past practices like this?

Lenders lend money because it's not always a failure. Lenovo is a great example of a successful PE strategy.

HN (and the world in general, I guess) has a tendency to focus on the successful VC outcomes and the PE failures.

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#55

Post by jfk13 »

sparrish wrote: post #9
Simulacra wrote: post #3

Earlier quoted context omitted.

There's also the issue - perhaps - of market saturation. How many guns does one need? My pro-gun friends typically seem to have 2-3 but shy away from any more than that.

As a firearm enthusiast, the answer to "How many guys does one need?" is always "Just one more." It's a fun hobby that I can spend time with my kids. They also make great investments as a quality firearm holds it worth and often increases in value.

And of course, the more of them we have around, the better the chances that one of them will somehow accidentally get misused one day.

Oh, sorry; I'm sure you're entirely careful and responsible, all the time, just like every other firearms buyer. So there's clearly no problem with having an ever-increasing number of them around.

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#56

Post by mikestew »

Simulacra wrote: post #3
vorpalhex wrote: post #2

This is not an uncommon story for firearm manufacturers unfortunately. Tooling costs are high, sales hard to predict, and designs can fail easily. Ian McCollum of Forgotten Weapons has done a lot of videos on this topic.

There's also the issue - perhaps - of market saturation. How many guns does one need? My pro-gun friends typically seem to have 2-3 but shy away from any more than that.

As will be clear in a moment, I'm hardly anti-gun but certainly not "pro-gun", and I count five in the gun safe. Shotgun, rifle, and a couple of handguns adds up quickly. Why so many for a "not pro-gun" guy? Shotgun/rifle/handgun fill different categories, and we have several handguns because I like Glocks, the Colt 1991 custom is purdy, and she likes her .357 short barrel.

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#57

Post by [deleted] »

mkeeter wrote: post #27
kevin_b_er wrote: post #16

Not a mystery: Private equity firm bought them out with borrowed money, raided their resources to enrich themselves, then left Remington to rot. It is a common story now. The private equity firm makes a bunch of money and people are jobless.

I like Jason Scott's take on it [1]: "I wonder how many times we're going to keep seeing news media post these sorts of news stories as a 'woah, a tornado hit this landmark' without including one single line about 'the landmark was put in the care of a tornado factory a few years back and never saw another repair'" https://twitter.com/textfiles/status/1096630478965260289

[deleted]

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#58

Post by [deleted] »

[deleted] wrote: post #57
mkeeter wrote: post #27

Earlier quoted context omitted.

I like Jason Scott's take on it [1]: "I wonder how many times we're going to keep seeing news media post these sorts of news stories as a 'woah, a tornado hit this landmark' without including one single line about 'the landmark was put in the care of a tornado factory a few years back and never saw another repair'" https://twitter.com/textfiles/status/1096630478965260289

[deleted]

[deleted]

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#59

Post by luckydata »

rtpg wrote: post #33
kevin_b_er wrote: post #16

Not a mystery: Private equity firm bought them out with borrowed money, raided their resources to enrich themselves, then left Remington to rot. It is a common story now. The private equity firm makes a bunch of money and people are jobless.

I get that money is money, but I feel like we desperately need to make conflict of interests prosecutable, so we can kill the self-serving mess that are LBOs. In what universe is "I borrow a bunch of money, buy a company, then force the company to basically borrow money from me" a value-creating operation? Cuz it sure isn't this one.

The only fix required would be changing slightly the definition of fiduciary duty expanding the concept to ALL stakeholders including customers and the people living where those businesses are based and it would become illegal overnight to do that.

It will never happen.

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