Colt Going Down? Market says ...

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philoe

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Let me preface this by saying I am a big fan of Colt firearms and the history of this great American brand.

I was digging around in fixed income offerings today in the secondary market and saw Colt Defense LLC unsecured bonds (mature in 2017) trading in the 40s. (These were part of a $250 million capital raise only a short while ago). That would be a $400 price tag per each $1000 bond. The implied yield on these things were north of 40% per annum.
Company analysis by private third party groups stated that revolving credit lines cannot be maximized due to covenants and that should market conditions deteriorate(military contracts), physical asset and liabilities would roughly equate to where that these bonds are trading now.
The bond market always knows what seems to happen before anyone else. I hope they are wrong but I feel they are right. Chapter 7 or 11 doesn't matter for me, not worth the headache.
I think that there will probably be Colt products in the future, but it won't be the Colt of the past.

p.s. I passed on the bonds btw. I think I am going to get a Gold Cup or two. Always wanted one. Looks like it might be my last chance to get one at a decent price. And I know those don't go to zero.
 
Mods please move to general. Don't know how I put in revolvers.
 
Things that are no longer made have a value based on what someone will pay for that item.
 
Look at their online catalog. You can get an (overpriced, IMO) AR, an (overpriced, IMO) 1911, or an 1873. That's about it. Tough to compete on those terms.
 
It seems like Colt's 1911 products have gotten a bit more affordable lately (same range as SA), and a nice rebate offer late last year (that I missed :cuss: ). AR offerings also priced relatively competitively too.

I hope they are acquired up by a company (and not an investment group) with a more versatile management team - Beretta comes to mind.

And praying that Ron Cohen never makes a move to Colt (Sig CEO, previous Kimber CEO :barf: ).
 
Guns sales were down last year, especially in the last half. Nothing new and exciting coming out. Plus, the fact that many people bought their first firearm within the last couple of years or stocked up on additional firearms.

Many of those people are now trying to sell their (lightly) used guns at reduced prices.

Colt has some great old guns, but nothing new that excites the populace. Their government contracts are what have kept them in business.

It doesn't look good.
 
Colt needs to jump on the Ruger and Glock model. Mid-quality guns that are affordable and relatively cheap, with some guns that are really high quality and not cheap.
 
Re: "I think that there will probably be Colt products in the future, but it won't be the Colt of the past."
Are the Colt products of today the same as the Colt products of the past?
Hopefully someone who knows what they are doing comes along and can help them improve on their current offerings and expand/update their catalog. I think the Colt of the future could be better than the Colt of today if the right person/company was in charge.
 
If they couldn't get their finances in good shape during one of the biggest surges in gun sales in history - it is indicative of serious problems with the company.

They're doomed.

If I had a choice between buying Colt Industry bonds or risking my money at the Blackjack table - I'd sit down at the Blackjack table and have at it.
 
At the end of the day, I really don't much care if "Colt" goes down, and quite frankly don't think it's fair that they keep getting bailed out time after time. Why? It's clear they can't handle their finances, and there current product range is... boring... to say the very least.

Colt is a SHADOW of the former company it once was, the real Colt died years ago.

JMHO, YMMV.
 
After Winchester went under I stopped caring about great old companies, Colt is not different. Many are willing to pay for quality but when you charge high prices without delivering a superior product your name will take you only so far.
 
Colt is a mess. One bad decision after another (for example, the (re)introduction of the Mustang 380 was too little, too late). If you don't know what the market needs and can't structure your offerings to suit, then you won't make it. That said, I did recently buy a Colt Bowie knife and was very impressed with the quality. It was leaps and bounds over other manufacturers, so IMHO the quality is still there, but not much else.
 
Only own 2, a King Cobra bright stainless and a 6601 blue label Hbar.Ill dump them eventually .Quality is great but these are older guns.
 
colt dropped everything I was interested in and decided to build overpriced versions of things I am not interested it. (I don't care if it is well built. If I can get just as well built for less money, they're overpriced) I will not cry over their passing if they go.
 
Colt has been counted out many times but it's still here. Somebody will buy the name and trade mark.
 
I generally support the "concept" of Colt's but...

they've been an artificially supported "zombie" corporation for a very long time. Eventuall, if things don't change dramatically, someone's gonna stick a fork in 'er.

Some would say that governmental supply entanglements have been keeping it going but I say that if it had been left to fail... It'd either go away based upon failed business practices/market awareness or be re-born as an independent and ultimately stronger entity.

Colt's needs three things:

Geographically relocate.
Develop a non-union work force.
Ignore any future lures of Federal contracts. These classically leave a trail of corporate wreckage in their wake as the corporate boards grow complacent at the Government's teat.

Todd.
 
Colt customer service really ticked me off over a Defender I bought new, ejected brass at my head and they blamed my grip.

IMO, any subsequent difficulty for Colt = Karma
 
Morgan Stanley (a bank) is in a leveraged buyout position regarding Colt. When Colt defaults, and they will, they will own the company, it's assets and the trademark. What they do with it is anyone's guess. A Chinese, Japanese or Italian company will likely want the trademark so they can produce a reproduction like the Winchester 73.

Any new Colt is a fair investment right now. In a few years they won't be exactly collectors but they will be worth what you paid for them and maybe a little more if you buy the right one. Gold Cup is a no brainer.
 
I won't be sorry if they go under, my experiences with trying to get my Combat Commander fixed years ago made me just ignore them as a company anyway. If they would have been run right, the piece of garbage should have been replaced, but they didn't even really try to fix it, and scratched it up both times they had it in for service. I expected it from Taurus when it happened, but I thought Colt would be better. I was wrong.
 
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