America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery • Hacker News Board

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

#81

Post by ryanmarsh » Fri, May 03, 2019, 4:39 PM UTC

ARandomerDude wrote: post #49

madengr wrote: post #45

Remington just doesn’t have that many interesting guns. There are a ton of firearms manufacturers in the last 20 years. I’m guessing the AR-15 market alone is billions in revenue.

And their quality has plummeted the past few years. I had an AK that could out-shoot my Rem 700 no matter what I did to it, and my 870 would only reliably eject Remington brand shells. Sold both, will never buy Remington again. Really a shame. Both of those were excellent guns back in the day.

That's sad. The 870 used to be the AK of shotguns. I beat that that gun like it owed me money and it kept cycling and shooting fine. The 700 used to be weapon of choice for many snipers. Hard to imagine today.

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

#82

Post by pbhjpbhj » Fri, May 03, 2019, 4:40 PM UTC

toast0 wrote: post #67

rtpg wrote: post #33

Earlier quoted context omitted.

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 alternative to leveraged buyouts is probably not a healthy company, it's more likely a slowly dieing company that goes out with a whimper, not a bang. Is one way better than the other?

We should probably just strip all societal assets that might potentially fail and give the money to the richest guy we can find, they're going to acquire all that money and we're going to die poor anyway, indeed we could just round up the poor people and shoot them and give the proceeds of the sale of any assets to that same guy; optimisation, it's what makes capitalism great, huh.

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

#83

Post by FireBeyond » Fri, May 03, 2019, 4:40 PM UTC

toast0 wrote: post #67

rtpg wrote: post #33

Earlier quoted context omitted.

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 alternative to leveraged buyouts is probably not a healthy company, it's more likely a slowly dieing company that goes out with a whimper, not a bang. Is one way better than the other?

So you're saying these firms are just being rewarded for putting the beast out of is misery and being the one to fire the gun?

The other way is absolutely better. The "bang" you hear is the bursting vacuum of PE sucking all the value out of the company, depositing it in their bank account, and leaving others holding the bag, a bag that's now far bigger because the company now has less to no ability to satisfy its obligations.

But the PE firm made billions for (sometimes, less than a year of) "management and consulting fees".

These kind of leveraged buyouts are perilously close to what Tony Soprano does to Ramsey Sports and Outdoors - take a controlling interest (albeit by a different method), utilize the business' credit lines, assets and collateral to bring in a lot of (temporary) value, transfer it out of the company, and leave the smoldering ashes of a company massively bankrupt with bad debts all over town, including many it didn't have before the buyout happened.

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

#84

Post by dba7dba » Fri, May 03, 2019, 4:40 PM UTC

godzillabrennus wrote: post #78

paganel wrote: post #36

> Because private-equity firms appear frequently as villains in the press, many people assume that they cater mostly to the superrich, earning high returns on investments for billionaire clients. They do. But by far the most important piece of their business — 48 percent, according to the data-analytics firm Preqin — is investing capital for American pension funds. This doesn't get mentioned often enough when talking…

I’ve been shocked to the extent politicians haven’t focused on the lost tax revenue from the gig economy. I’m certain it’s caused a drop in tax revenue from what would normally constitute middle class tax payers.

Politicians are not shocked by anything except when they lose in elections...

Edit: In fact, what they say/act that they are shocked about is often a projection they put up to make sure they get reelected.

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

#85

Post by jeffdavis » Fri, May 03, 2019, 4:41 PM UTC

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.

Do they really buy the whole company, or do they just buy enough to control it?

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

#86

Post by airstrike » Fri, May 03, 2019, 4:41 PM UTC

johan_larson wrote: post #60

How are these strip-shops able to resell the heavily debt-burdened companies they create? That's the part I don't get.

They sell it to another sponsor who thinks they can do more with it.

But by and large most private equity shops are not in the business of asset stripping. Those deals just don't make the news and the average reader is oblivious to them

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

#87

Post by TallGuyShort » Fri, May 03, 2019, 4:42 PM UTC

dba7dba wrote: post #76

TallGuyShort wrote: post #43

Earlier quoted context omitted.

Let's see, 3 for 3-gun matches, 1 more for PCC matches, 1 more for precision matches, a few extra if I don't compete in the same class for all of those, 1 the kids can shoot, 1 for my wife to carry, 1 for me to carry, bigger ones for the house and cabin, a few extras for the zombie apocalypse. No, there's plenty of demand for guns. Remington's just lost their former reputation.

Lol, you forgot to mention buying ones for family and friends, like Matt Carriker of offtheranch channel. I agree free market (with certain safeguards) is usually the best path for a society to sustain itself and prosper. But I feel private equity firms are definitely not good for a free market to sustain itself. And yet they and their lobbyists will insist free market is the best for our society, use that line to pr…

I don't see the market not sustaining itself, though. As a consumer, if I'm not satisfied with Remington, I just buy a Mossberg instead of an 870, or a Bergara instead of a 700, or literally anything but an XD. There's a lesson to be learned that if you open your investment to the public or get in bed with a private equity firm, you may now be pressured or forced into short-term thinking that isn't aligned with your long-term vision. But I don't see this as a failure of the market. In a free market, losers lose.

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

#88

Post by airstrike » Fri, May 03, 2019, 4:42 PM UTC

inb4 private equity is evil and we should kill all financiers

Please don't throw the baby out with the bathwater

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

#89

Post by sDlEzAtyoNAz » Fri, May 03, 2019, 4:43 PM UTC

jcranmer wrote: post #17

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.

There is an intriguing trend in the United States where, for the past several decades, the number of gun owners has gone down but the number of guns has gone up.

It's not really intriguing when you consider that non-hispanic whites are the most likely to own firearms, and that that group's size has been essentially stagnant for the past few decades and is currently in decline.

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

#90

Post by duxup » Fri, May 03, 2019, 4:44 PM UTC

paulddraper wrote: post #75

duxup wrote: post #51

Earlier quoted context omitted.

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.

I'd describe it as less "borderline fashion" (which any hobby has) more as legal caprice. Historical examples: * The Firearm Owners Protection Act banned machineguns manufactured before 1986. * The Federal Assault Weapons Ban banned certain semi-automatic weapons excluding those manufactured before 1994. Firearm hobbyists need decade-plus forward thinking predictions. What's today legal is a felony tomorrow, unless s…

I'm not sure I understand.

You see popular revolvers selling well... nobody is buying those based on the law.