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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

#151

Post by leesalminen »

everdrive wrote: post #142
leesalminen wrote: post #134

Earlier quoted context omitted.

I don’t believe that looking out for one’s own interests (“selfish”) is wrong. My dad taught me a valuable lesson as a child- the world owes you nothing and as long as you understand that you'll be fine. I take that to mean that nobody else will look out for you so you have to do what's best for you. In my situation, my employees profited nicely from a PE acquisition. They all got a sizeable transaction bonus. Not on…

I'm sure most of HN is aware of where selfish behavior can go wrong. My favorite personal example would be a "tragedy of the commons." For certain, groups where individuals all act in their own self interest sometimes come up with the best solutions for everyone. It bothers me that people believe either maxim must always be true for all circumstances. (this is effectively socialism vs. libertarianism) It seems very c…

Sure, the only things in life that are certain is death and taxes. Nothing else is really that black and white.

I still don't believe that a founder doing what's best for them and their family is "wrong". Absolutely, employees should be a concern and a founder looking to be acquired should do whatever possible to ensure a successful future for them as well. But to say that a founder must own a company forever and ever with no chance at ever exiting is not something I can agree with.

No hard feelings, but I hope we can both take away here that there are nuances to this topic (and every other topic) and to say that "selfish behavior is wrong" is too extreme a statement.

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

#152

Post by everdrive »

leesalminen wrote: post #151
everdrive wrote: post #142

Earlier quoted context omitted.

I'm sure most of HN is aware of where selfish behavior can go wrong. My favorite personal example would be a "tragedy of the commons." For certain, groups where individuals all act in their own self interest sometimes come up with the best solutions for everyone. It bothers me that people believe either maxim must always be true for all circumstances. (this is effectively socialism vs. libertarianism) It seems very c…

Sure, the only things in life that are certain is death and taxes. Nothing else is really that black and white. I still don't believe that a founder doing what's best for them and their family is "wrong". Absolutely, employees should be a concern and a founder looking to be acquired should do whatever possible to ensure a successful future for them as well. But to say that a founder must own a company forever and eve…

No offense taken at all.

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

#153

Post by kpennell »

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.

That's how Mitt Romney got rich

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

#154

Post by dfrage »

lostapathy wrote: post #95
madengr wrote: post #41

Earlier quoted context omitted.

Also, with the number of CCH licenses, those don’t needs a NICS check.

That of course is state dependent - not all states carry permits get you out of the NICS check.

And in the other direction, fewer states are requiring a permit, so no doubt some people are not bothering to renew their permits.

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

#155

Post by frenchman_in_ny »

Zenst wrote: post #68
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.

https://en.wikipedia.org/wiki/Asset_stripping by any other name, a scourge of business in the 80's. Today, it's less vocally lambasted and less public outrage as in the 80's, which in today's internet times, raises much thought as why that is so. I suspect that it's due to lack of media attention compared to back then.

This wasn't asset stripping. They did a dividend recap. Asset stripping is transferring assets outside of the credit group.

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

#156

Post by pps43 »

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.

> How many guns does one need?

I saw several estimates that agree on average somewhere between 8 and 10.

A couple of bolt action rifles for hunting, rimfire for plinking with kids, a pump-action shotgun stashed somewhere for home defense, a pistol to carry concealed, another pistol as backup, grandpa's revolver that is now a decoration, and three old rifles in various state of decay at the back of the safe that everyone forgot about - those are all very typical.

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

#157

Post by Swizec »

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…

> a part that will manage to enjoy its pension and the other part that has no clue how will pay for its old age.

Quoth Bladerunner: Every civilization was built off the back of a disposable workforce

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

#158

Post by ARandomerDude »

omegaham wrote: post #113
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.

I'd argue that you don't need interesting guns if your basic offerings are really high-quality. There's room for "plain oatmeal" in pretty much any market. The problem is that even their basic offerings have drastically declined in quality. If you make plain oatmeal, you'd better be really, really good at it, or else you have absolutely nothing going for you.

Exactly. This is Glock. Plain as it gets but they just work (TM).

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

#159

Post by dfrage »

paulddraper wrote: post #130
duxup wrote: post #90

Earlier quoted context omitted.

I'm not sure I understand. You see popular revolvers selling well... nobody is buying those based on the law.

Historically, politically-related events do in fact play a large role in gun sales. There were lengthy and severe shortage of small arms and ammunition following both Obama's election and the Sandy Hook shooting, especially .22 caliber ammunition. [1] I don't think .22 ammunition is on the chopping block, but there's a general positive feedback loop, like a bank rush. [1] https://en.wikipedia.org/wiki/2008%E2%80%9313…

.22 ammunition uses rimfire priming, which requires unique machinery which as I recall no US company dared to buy more of, as mentioned in the Wikipedia article you linked to. Existing US 3 billion rounds per year + foreign imports couldn't keep up with the demand, which also seems to have included a lot of new gun owners, buying .22 models like their main guns or conversion kits for cheaper practice.

Perhaps related to this scam, I don't remember any company other than Remington building out a major increase in capacity, that article mentions their $32 million plant expansion. Companies were reluctant since they didn't know when demand and supply would get back in sync, I would also wonder if smokeless powder capacity was a factor, there aren't very many companies that make it.

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

#160

Post by pps43 »

stcredzero wrote: post #70
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.

I'm a relatively new gun owner. I have 2 firearms, and by design I won't have any more for a very long time. I would have just the rifle, but it's often awkward or impossible to take classes and compete without a pistol. My entire system runs on the same caliber, and all of the magazines are interchangeable. It used to be that almost every American household had someone who was a competent shooter, an good cook, a co…

In poor neighborhoods communal guns are quite popular. They are stashed at locations that several people know about and have access to.
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