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Gun companies are going public

Discussion in 'General Gun Discussions' started by cbrgator, Oct 20, 2009.

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  1. Justin

    Justin Moderator Emeritus

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    THE CHAIR IS AGAINST THE WALL
    It's also a possibility that I could be attacked by a great white shark tomorrow, despite the fact that I have no intention of going anywhere near the ocean and I currently reside in an arid, land-locked state.
     
  2. texas bulldog

    texas bulldog Member

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    +1 justin. i think there's some unnecessary freaking out going on in this thread.
     
  3. EdLaver

    EdLaver Member

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    All I can say is I have what I need...simple as that.
     
  4. Ridgerunner665

    Ridgerunner665 Member

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    I'm not freaking out...I'm just offering one of the many ways this could end badly.

    Since most of you missed the point on that one...lets try this.


    Its never a good idea to have all your eggs in one basket...is that simple enough for you?
     
  5. oneounceload

    oneounceload member

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    Unless you REALLY watch that basket!...:D

    There are several ammo competitors to them
    There are several long gun competitors to them
    There are several suppressor competitors to them
    They do not really compete with handgun makers.

    IF they went out of business tomorrow, what would happen? Competitors would step up to the plate, maybe even buy their equipment, and turn out product to meet demand

    Would we realyl run out of cars to buy had both GM and Chrysler went away?
     
  6. Plinks

    Plinks Member

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    One key assertion made by Cerberus is that it's goal is to "consolidate a fragmented industry it saw as under-managed" Given the plight of Remington, Colt, Winchester, just to name a few, it is hard to argue against the "under-managed" charge. Especially while Fhn, Glock, Sig, Beretta, and scads of other European companies thrive.
     
  7. oneounceload

    oneounceload member

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    Plinks - what I am seeing is agreeing with you - there are way too many small companies trying to compete with big boys. Gun companies today seem to fall into one of two categories - small niche players who excel at their specific craft and the big "wally-world" type who mass market mass-produced stuff but really excel at nothing in particular - IMO, the latter is what Cerebus is going after - profit in volume (the OLD Kmart philosophy from the SS Kresge days) - where it is better to sell a million items and make a dollar than try to sell one for a million. and for fans of 870's and other mass-produced average-quality guns - that works just fine.....until that Chinese knock-off comes into port at a lower price point.

    It seems funny to me that, even in this recession, gunsmiths and custom makers are STILL running 2-6 year lead times on repairs/custom builds and making a profit, but the makers of average to junk stuff are in financial trouble trying to compete with China/Russia/Turkey/Brazil/Phillippines
     
  8. feedthehogs

    feedthehogs Member

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    +1

    They want profits just like any other investment group. When the income from the last year of panick buying goes away next year, capital has to come from somewhere.

    Given their investment direction in the past I would wait.

    Nothing like a fresh influx of investor money thru stock to buy new corp perks and then sell off whats left, then you can use the stock certificates in the rest room.
     
  9. Zoogster

    Zoogster Member

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    Anytime a company goes public they lose many freedoms to run thier company how they want.
    They are no longer completely thier own boss, but governed by even more extensive laws.

    Publicly traded companies are also subject to the ups and downs of the stock market. Meaning they may benefit in good times, but can go out of business during bad times when dependent on the values of thier stocks.


    So going public means they both lose the freedom to do as they wish while running the business, and they are subject to unexpected bankruptcies.


    A large company will also slash and cut subsidiaries when times get tough. Meaning they may kill off a few gun makers to save thier auto branch for example, if necessary.
    While the separate gun company would have fought until the end to stay in business.
    Even just within the gun company itself, they may close branches that were once entire separate firearms manufacturers to save another branch.
     
  10. Blackbeard

    Blackbeard Member

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    Companies don't go out of business because their stock tanks. Their stock tanks because they're going out of business.
     
  11. cbrgator

    cbrgator Member

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    Thank you Blackbeard for correcting Zoogster.

    Additionally, for all you tin foil hat freaker-outers. The man Cerberus has charged with running this corporation is SUPER PRO GUN. He has run multiple times (and lost) for a position on of the board of the NRA. Plus, Mr. Cerberus himself Steve Feinberg is an avid hunter and Pro 2A guy. And although gun rights isn't partisan, it certainly leans GOP and Feinberg is a huge donor to the GOP. I'm sure it has much more to do with low taxes but still.

    To sum it up: I see no sabotage of gun companies in this deal. Maybe I'm just naive, but until I see facts to the contrary, that's what I'm seeing.
     
    Last edited: Oct 21, 2009
  12. Ridgerunner665

    Ridgerunner665 Member

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    cbrgator,

    I didn't know any of that...it just raises a red flag to me when all the eggs are in one basket though. No matter who's currently in charge of it...
     
  13. Tamren

    Tamren Member

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    From talking to the Remington gunsmith/rep who ran the 870 and 700 armorer's course at CST, Cerberus has done the firearms industry a lot of good.

    He said that when Cerberus took over, Remington had a profitable year for the first time in almost a decade. The cash infusion when Cerberus bought Marlin through Remington saved Marlin.

    According to the Remington rep, the DC "Plinker" (Can't stand to call that #[email protected][email protected]#@! a sniper) almost drove Bushmaster out of business by using one of their rifles on his murder spree, Cerberus stepped in and saved that company too.

    From what I understand, the original founder of Cerberus is ex-military and pro RKBA. Personally, I don't believe having someone like that owning a handful of American firearms plants is necessarily a bad thing.

    But I can see your point if ownership of the company shifted hands.
     
  14. cbrgator

    cbrgator Member

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    Stephen Feinberg. He is very pro RKBA, but from what I gather, the extent of his military experience was ROTC at Princeton.


    The extent of these companies is not as sweeping as some are making it out to be. They own Remington, Bushmaster, DPMS, Cobb, Alliance Armament, and Marlin. I mean that sure isn't peanuts but it's not like they control the market. If they also owned Colt, Winchester, Savage, Mossberg, and Stag, it would be a whole different story. Remember, shareholders will not control the corporation. The board of directors will and they have a fiduciary duty to NOT run it into the ground and make it profitable.
     
    Last edited: Oct 21, 2009
  15. texas bulldog

    texas bulldog Member

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    marlin, remington, DPMS, and bushmaster is hardly "all our eggs in one basket". there are LOTS of other manufacturers out there.
     
  16. KBintheSLC

    KBintheSLC Member

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    I beg to differ (sort of). Price, while certainly an aspect of the choice, is rarely the leading reason most folks choose a particular gun. However, ammo is a different story. The price of ammo, especially bulk practice ammo, is perhaps the top driving factor for product choice. On the other hand, defensive ammo is less vulnerable to price wars as it is driven by performance value (or the perception thereof).

    I do agree though... this could be a way for domestic ammo manufacturers to compete with foreign makers.
     
  17. oneounceload

    oneounceload member

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    Just look here and on the other main gun forums - the majority of folks want a top quality gun for under $200.....unless it's some POS, it typically isn't happening, but then these are the same folks who complain about US makers offering their version of some cheap POS to compete with the Chicom stuff and then wonder why their neighbors are being laid off.

    Quality COSTS, and most folks posting here, especially in the shotgun forums don't want to spend the money for quality - they brag about being as cheap as possible as if buying some POS from China is something to be proud of - it isn't
     
  18. noskilz

    noskilz Member

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    Agreed. +10
     
  19. bpl

    bpl Member

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    Amen, brother!

    Save a bit longer and buy quality! American made, if at all possible!
     
  20. Telperion

    Telperion Member

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    It always puzzles me that gun forums react with such hostility to the fact that business actually takes place in the firearms business.
     
  21. noskilz

    noskilz Member

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    I disagree with your analysis of this thread. Some tin-foil hattery, but the majority of posters in this thread have been positive on the business side of firearms.
     
  22. iiibdsiil

    iiibdsiil Member

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    Isn't DPMS mostly AR-15 stuff? If so, it's good that someone isn't worried about an AWB that would make the investment a waste.
     
  23. FROGO207

    FROGO207 Member

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    Business will be business and that is for profit driven. If it happens to help the firearms sector we all can agree to that. Lets just hope that the DC bunch are so busy chasing their own tails around that they all but forget about the firearms issues. I will purchase American and locally as often as I can to help our economy and my area in particular. Would it not be something if the firearms sector saved the automotive sector after the dust settled!
     
  24. gym

    gym member

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    This post made me look at Ruger shares. There is an unusual amount of Short interest in the stock SGR, 27% of the float on 10/22. In this market hitting new highs, the stock may incur a short squeeze. Just an interesting co-incidence, That is a very high percentage of people who had been short the stock, or for those who don't follow the market, they were betting it to go down. That only lasts so long, at some point they have to cover their short position, or lose their money. this was from today

    Current Short Interest Shares 5.12 M
    Current Short Interest Ratio 24.00
    Float 18.78 M
    Short Interest as % of Float 27.30
    Average Daily Volume 204,000.00
    Outstanding Shares 19.10 M

    The float is the total number of outstanding shares, almost 19 million, at the current price of around 13.50 per share, you can see how much it would cost to cause any movement in the price. And this is only one company, so the theory of Bloomberg or anyone else being able to significantly alter the markets is very low if not nonexistent. As it would be illegal for him not to file paperwork notifying the exchange and other governing bodies of his position in the company. He would then be subject to all kinds or Sorbain Oxley rules.
     
  25. jon_in_wv

    jon_in_wv Member

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    Ruger was selling even cheaper that that earlier. I bought SWHC though. It was trading at $1.80 a share. Its currently at about 5 bucks. It was around 20 dollars before the Supreme Court agreed to here the case. Then it dropped big. It will recoup in time I'm hoping.
     
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