011495 - Possibly the Last Burst Made

Discussion in 'Vintage Les Pauls' started by delawaregold, Nov 13, 2017.

  1. sws1

    sws1 V.I.P. Member

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    Apples and oranges. Consumers don't have the same protections and options available that big business does. Gibson will restructure it's debt, sell off the underperforming brands / debt, and retain the core guitar making brand. Henry (as owner) or the lenders will lose alot of money, but Gibson will survive.

    The guy above with $600,000 is debt will be damaged goods for a long time.
     
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  2. mudface

    mudface Senior Member

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    Whatever you're smokin', you need to cut it in HALF................i can smell the B.S. from here.............All drama & no facts.
     
  3. dissaffected

    dissaffected Senior Member

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    My understanding is that Gibson has total debt/EBITDA of 13x (at least that is what I remember from the public filings on their tradeable debt). In other words total debt is 13x EBITDA- earnings before interest, taxes, depreciation, and amortization. EBITDA is a backhand measure of operating cash flow. That is a lot of debt relative to cash flow. It also means that if the weighted average cost of debt, ie interest rate, is 6%, almost all the operating cash flow is being eaten up in interest. And 6% is probably conservative given their total debt/EBITDA. So the key for Gibson is growing their sales and/or increasing cash flow. Buy a new guitar- or something from Onkyo- or.......................................Help Henry out.
     
    Last edited: Nov 21, 2017
  4. VancoD

    VancoD Junior Member

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    lol - the ability (and willingness) to write a check has far more to do with your ego and intelligence than it does in determining what's actually a decent instrument.
     
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  5. steve2

    steve2 Member

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    If you owe 13x income, you are not paying 6% interest, and they are paying around 22% on the one year deal that comes due in April. Could a miracle happen in April? They could ditch everything (the other brands they own, like Onkyo), sell the top end guitars for about half of what they charge dealers now, and basically sell into the future, but that would be to make one payment due in April. I will say it again, the current "GIBSON" is toast, and I would bet that the only people willing to pay off their debt would be the people that own the Korean (Samick) and Guangdong factories, because they would have help from their governments to get established and they have way cheaper non-union labor
     
  6. steve2

    steve2 Member

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    Can you state one thing that is wrong with what I said? You sound like a factory worker or maybe a letter carrier on beer number 7 of your daily 12 pack
     
  7. mudface

    mudface Senior Member

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    :lol:
     
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  8. dissaffected

    dissaffected Senior Member

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    Steve2- it is you that has fact issues. 1- Gibson has debt which equals 13x EBITDA not net income. Huge difference. Please pick up a finance book and learn the difference. 2. Gibson publicly traded debt is currently trading at around 10% last I looked. Not 20%. It was issued to the holders at even lower rates but the price has drifted down in the secondary market. So the rate Gibson is paying is even lower than 10% based on issue price. If you want to be a troll and call out people for being stupid, it helps to know facts and be able to interpret reality.

    Gibson may well go belly up. Their cash flow is stressed. But please learn more about that which you speak. Open a finance book and learn about the diff between EBITDA and net income and try to understand the capital markets
     
  9. VictorB

    VictorB Formerly LZF Super Mod

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    Let’s keep it on topic please.

    If it doesn’t have to do with the Burst in this thread, take it elsewhere.
     
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  10. BrianB

    BrianB Senior Member

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    Grew up in Abington, now live in East Bridgewater...can't help but think we've crossed paths at some music store thru the years. Out of curiosity, which store in Brockton?

    B.
     
  11. Classicplayer

    Classicplayer Senior Member

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    That would have been Central Music on High St. (downtown). I bought several instruments thre back in the day.


    Classicplayer
     
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  12. eric ernest

    eric ernest V.I.P. Member

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    Your comments omit some details.

    Gibson had around 150 employees in 1959. Around 1500 by 1966. Now? I'm not sure....but it has to be very high.

    Many of the materials, chemicals, and manufacturing techniques changed considerably....many to the negative.

    The effort to get greater quantities out more quickly negatively changed the methods of construction.

    Many 50's materials were outlawed.

    Gibson ignored the value of the continuity of skilled workers. In the 50's there were sometimes 3 generations working at the factory. (Moving to Nashville was a big step backwards, here.)

    I'm also certain the figures for employee turn-over are much higher now.

    Whatever advantage the Gibson company had, they squandered it for decades. That being said, Gibson has always had a few products that seem to shine, and many of their post 70's-80's products are exceptional.
     
  13. BrianB

    BrianB Senior Member

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    Went there a few times back in the late 1980's. Remember it well. I usually went the other direction to Music Unlimited at the Hanover Mall... Occasionally to South Shore Music in Weymouth Landing.

    Good times.
     
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  14. Thumpalumpacus

    Thumpalumpacus Senior Member

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    I'm thinking Gibson Guitars is the underperforming brand. Why else the CME "floor model" blowout? They've obviously got backstock to move and would likely appreciate a quick cash injection.
     
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  15. Classicplayer

    Classicplayer Senior Member

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    Good Times, Yes. Music Unlimited Kingston store; that's where I bought the Classic in my avatar pic. Also shopped Scituate Music many times.


    Classicplayer
     
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  16. sws1

    sws1 V.I.P. Member

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    Dealer performance isn't necessarily the same as Gibson performance, since Dealers have to buy the guitars from Gibson, and have a minimum to buy per year. They are related, but not identical.
     
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  17. fleahead

    fleahead Senior Member

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    What about the fact that they probably have less dealers in the US than any time in recent history, some of whom have been the main dealers of high end guitars? Or the fact that international sales are taking a hit from CITES? That has to be having a noticeable hit on their bottom line. Plus the failure of brands they bought... Jus' sayin'.
     
  18. 58 special

    58 special Senior Member

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    this thread is way off topic
     
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  19. VictorB

    VictorB Formerly LZF Super Mod

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    Sure is.

    I saw that burst in person btw.

    Pictures do not do it justice.
     
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  20. mudface

    mudface Senior Member

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    What does Gibson failing have to do with this guitar?
     

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