Fender Musical Instruments Corp files for IPO

http://www.reuters.com/article/2012/03/08/us-fender-ipo-idUSBRE8270M420120308

o rly

hmm

not shocked, and kinda saw this coming since over the last few years they have replaced most of their upper level management with the dudes that took Guitar Center public (which eventually tanked after they had all gotten the initial mega-payout and went back to private via Bain Capital). Still, wow, super gross.

there's a billion Chinese

just so I can fully understand, this is super gross because it puts their business practices/plans solely at the whim of generating money for the shareholders, right

oh yes. the old maximized profits vibe. so glad we dropped this line 2 years ago when i got the whiff of what was to come and guessed right.

So...more crap like the CyberTwin amp line, I'm guessing.

also considering the general positive vibe lots/most of musicians have towards the OWS 99% thing, def NAGL at this moment in time

Does it make any sense for an instrument manufacturer to be public, actually? I don't see the benefit to the product tbh.

The benefit of going public is usually generating a lot of capital very quickly, yes? So I'd imagine that they have some kind of expansion plans in the works. Whether this is adding more product lines, entering or expanding in new markets or both or other I don't know.

Fender SEC filings, for those curious about Fender/Jackson/Charvel finances once the prospectus is released.

Benefit of equity financing is that paying shareholders is optional, paying bondholders isn't.

this will be the first instrument specific public offering actually, although companies with small footprints in the MI industry have been public offerings (harman kardon, kaman). and yeah i think most of this echoes the whole harley davidson IPO thing where the hope is that chuckleheads around the world will buy one stock certificate and hang it on their wall. Also the current owners and the people that brought this to this point get massive payouts/bonuses if it is accepted.

most likely, this is going to make their products suck shit as they reduce quality to increase profitability.

hmmm disheartening....i remember when i brought my amp into your place JJ you were saying how Ampeg's quality/service had gone to shit as well....

just for reference, who are the "good guys" left in the instrument biz?

I believe Rickenbacker has been owned by the same family since its inception. Their stuff isn't cheap (nor is it crazy overpriced), but they've never had gimmicky product lines or trend-chasing gear.

Ugh, Ampeg, I had a BA-115 bass amp (since sold on eBay) that needed a new transformer and some other parts, and the guy fixing it had a devil of a time getting parts or getting Ampeg to help him out. Took him four months to do the repairs.

Buy your MIA Teles and Strats now, then bury them in the backyard.

imo pretty much just the small dudes - lots of indie pedal guys (electroharmonix, earthquaker devices, catalinbread, etc. MXR peeps are ok), guitar people like reverend and G&L. basically all of the people that havent decided that the best way forward is to acquire as many injured guitar brands as possible and then fuck them up. xpost to m@tt

xxp More like BA-lls amp...

hasn't Fender sucked with George & Leo sold it an age ago? if I were in the market for a new guitar Fender'd be very low on the list

So basically post IPO Fender will be cranking out even more 'Road Worn' and crappy signature/relic/replica guitars.

btw there's like zero chance of making money off of this as a shareholder, right

actually if Fender co-brands with Guitar Hero or something similar I can see there being some money in it DJP

that would be my guess. much like the return on harley i mentioned upthread, its more of a cutesy lifestyle investment than a logical one. xpost

I'm not at all convinced that public shareholders are much more shortsighted than the private equity firms that loaded the Fender up with debt or diluted brand reputation with sweatshop manufacturing.

If anything, the past 15 years have demonstrated in a number of industries that public shareholders exist to be fleeced by management. This is especially true in an era of inactive index/ETF investing (absentee ownership). Its arguable that trader compensation and risktaking in finance would have risen to their stratospheric levels had Wall St. remained private partnerships, risking their own money. There are a number of well known tech names that engaged options issuance/share buyback accounting dance for years to transfer much or most reported profits to insiders.

I really can't thank jjj enough for his constant stanning for G&L on this board. I got a wonderful, wonderful ASAT Tribute for the same price I would have paid for a mediocre Tele.

xxxp I've got two Fenders, a P-bass I bought in 2006 and a '72 Tele Thinline reissue I bought in 2003, and they're both fine.

Gretsch is still family-owned and their guitars are amazing fyi

xp

recently bought a new Fender Mustang bass for dirt cheap and it is really nice. made in Japan for some reason.

G&L is a nice company. However, current Fenders are at the top of their (contemporary) game, with the Mexican Fenders in particular great guitars. Session guitarist friend of mine has said he's seeing more and more MIM Fenders show up at sessions.

Yep, have one of those (Gretsch), too!

the whole gretsch/fender relationship is so weird and secretive, prob because some peeps would flip out if they thought gretsch had been sullied by fender.

and yeah opinions and all but man i cant believe that people buy the mexican made fenders when there are like infinitely better instruments available for the same price. although i would venture to say that the rise of them that your friend is seeing has less to do with them getting awesome and more to do with people not wanting to spend what you need to to buy a decent fender american strat these days

That could be true. But keep in mind, just as there are several different lines of American Fenders, there are plenty of Mexican options, too. MIM is not some monolithic designation.

I should also note that my Tele and Strat, both Mexican, each cost me about $400, the former new way back when, the latter used. Can I get a good G&L for that price? Gretsch? Rick? And forget Gibson ...

actually if Fender co-brands with Guitar Hero or something similar I can see there being some money in it DJP

― unlistenable in philly (underrated aerosmith bootlegs I have owned), Thursday, March 8, 2012 12:09 PM (16 minutes ago) Bookmark Flag Post Permalink

^^fwiw the bottom totally dropped out of the whole guitar hero/rock band fad, both those series are basically "on hold" right now

current mex standard production strats and teles run between $500-600, the G&L legacy series runs between $500-&700, so yes, you can xpost

They can just accelerate doing what they want to do which is to offshore more production -- I'd guess it's close to being maximized now -- except for the high-end tube amps that haven't changed in decades. And the guitars, which they can custom shop for the wealthy hobbyists and Nashville players with contract.

again dude i am def not trying to establish what is the "better" guitar, because thats a fools game and a bullshit argument at best - i think the MIM strats were great guitars when they were $300-$400 new, but the price increases over the last few years have put them in a pretty compromised position at this point IMO.

actually the beginning of the end for me was when they shifted production on the hot rod amps from america to mexico without telling anybody (which i discovered by reading the back of the amp when it showed up in the shop) while simultaneously raising the price. theres really no way to read that other than str8 profit gouging.

and just fyi, i own some midperiod fender stuff that i love, including a mexican squier strat that is the shit, and we sold their stuff for 25 years, so i am not a fender hater at all. i just think the company has been driven off the rails in the last 5 years pretty much just to set up this IPO.

I have heard really good things about the Squier Classic Vibe series.

my main bass is a MIM fender jazz i bought on clearance at guitar center in college (for some reason no one was buying sunburst then so the sunburst were like $250 new)...it's been a great bass

the one thing I did that really took it up a notch was replace the kinda cheesy stock bridge and put in a Leo Quan Badass II replacement bridge, which is like the most amazing value product in all of guitarland

funny coincidence that I was reading a review for a VW jetta today that mentioned it had a "phenomenal" "Fender brand stereo"; so i guess the plan is branding deals that have nothing to do with guitars, aka the 'Beats by Dre' way?

fyi- article link: http://www.thetruthaboutcars.com/2012/03/review-2012-volkswagen-jetta-gli-take-two/

is this a good place to mention that every time I see someone wearing Beats By Dre headphones I want to point and laugh at them

Go ahead, they can't hear you.

http://images.fender.com/features/premiumaudio/gallery/large/FPA_startupscreen_lg.jpg

http://images.fender.com/features/premiumaudio/gallery/large/FPA_speaker_lg.jpg

One drawback to that: you have to replace the tubes every three months.

VW sold a CAR that came with a Fender guitar that you could plug into it.

(I played one and it sucked fwiw)

i thought that was a first act guitar? ive had them through the store for repair and they were actually worse than the garden variety walmart first acts. which is saying something

hmmm you could be right... it was just lying around at a studio we were in recently and the engineer told me the story about the VW. It was without question the shittiest guitar I have ever picked up, the intonation was awful, it was literally nearly impossible to play.

it is a first act! i have one and played a couple shows with it actually. switched out the pickups and it became something moderately cool.

http://blogs.cars.com/photos/uncategorized/vwguitar2.jpg

the garagemaster iirc

it wasnt super amazing abt staying in tune but i didn't have intonation or playability problems. also it had an onboard preamp which was kind of funny.

is there some study out there that shows that making these things in mexico really makes them worse, otherwise there seems to be some weird nationalist side to this

xp yeah! i put humbucker-sized p90s in it

actually the whole consumer audio thing is a v v likely component of this decision, i think fender is guessing that a bunch of rebranded import audio with fender logos on it could get loaded into every target/best buy/etc in the nation, and they already sell gtrs to best buy (in the pretty much doomed to fail music store in a store concept) and cheap guitars to target so the pipeline is already there.

xpost considering the guitars i am recommending are largely from korea and indonesia, i am def not on the nationalist tip

what makes the mexican guitars "worse" has nothing to do with the people that are building them, but has everything to do with the pickups/hardware that fender chooses to use in their budget line and a certain laxness re: usa side quality control checking.

like i am pretty confident in my statement that yugos suck, but it has nothing to do with yugoslavians being bad at making stuff and everything to do with parts and materials. well and in that case design which is less of a factor here.

are you defending yourself to iatee

http://www.geekalerts.com/u/marshall-dab-radio.jpg
;_;

what is that - a microwave?

a digital radio

lol

I really loved the super-mini Marshall amps that came out awhile ago, those are fun

xpost considering the guitars i am recommending are largely from korea and indonesia, i am def not on the nationalist tip

okay fair nuff, I misread your tone

wasn't there a point in Fender history when the Mexican Fenders were absolutely the business? the issue now with Chinese etc guitars is shoddy workmanship - I have a Chinese Guild, nice lookin tobacco sunburst on a guitar that plays like total garbage compared to old Guilds

I really loved the super-mini Marshall amps that came out awhile ago, those are fun

― the sir edmund hillary of sitting through pauly shore films (Shakey Mo Collier), Thursday, March 8, 2012 7:51 PM (4 minutes ago)

I have an MS-2 and it's a tonne of fun.

Also has the advantage of sounding fairly Marshall'y, which a DAB radio with a Marshall logo slapped on it doesn't.

well 2 things wrt that - one of the biggest and worst moves ever wrt fender purchases was when they decided to "retool" the guild brand to appeal more to the taylor customer (who they saw as the real competition) by thinning out the tops and basically nullifying all of the stuff that made guild guild, and alienated lotsa old school guild dudes in the process. it was a terrible misstep and prompted us to drop guild around that time after selling out our current stock (this was before the chinese stuff came around, but fender moved production in house and fired all the old guild dudes. lame.)

the second thing is that there are gradations of chinese factories when it comes to building guitars, and you pay for the factory level you want - ie if you use a budget factory, its not going to be a dedicated guitar builder, its just going to be a job lot so skillsets and consistency go pretty much out the window. if you use one of the high line chinese factories, you are going to pay a ton more for the guitar, but the quality is better because they have skilled luthiers building the thing. i have a chinese guitar hanging in the shop that is about 1K right now and it is the business, easily comparable to a 3K martin any day of the week. but theres still resilience against overseas stuff because the crap stuff is 80% of whats out there and creates a perception of what quality can be achieved.

xpost to aero

jj - been thinking about upgrading from my old Aria late 80s korean acoustic to something good/solid/midline priced

heard good things in the internets about Art & Lutherie/Seagull a Canadian company that apparently make pretty good value price 4-600-ish priced acoustics...you familiar?

or any other advice on a less than 1K acoustic

I can't speak for their six-strings, but I have an acoustic bass made by these guys that is like the best anything I have played, ever. The neck plays like a dream and the tone is super warm and rich. Good, solid, handmade instrument. Their stuff is in the sub-$1,000 range.

ha meeting of the minds, the company i was going to mention owns breedlove - its called bedell guitars and they start at $300. ive got a bunch in stock actually. the seagull/art &lutherie stuff is good too. also i will hook a brother up obv.

also re: the acquisition stuff i was talking abt upthread, when bedell bought breedlove priority number one was not to fuck with it, which included voluntarily hiring all the former owners on in executive positions.

if I got another Guild I'd want it to be the '71 I played in some way-too-expensive London guitar boutique, that thing sounded amazing, but I think I am actually (shield your eyes from this sentiment jjj!) maxed out on guitars. I had one built for me by John How a couple years ago and between that, my two Larrivees (SD-60 & OM-3), an old Gibson LG-1 & my electrics + the less check-it-out stuff I tour with I'm pretty much good I think

OTOH that '71 Guild was awful nice

Gibson LG-1s are the fucking awesomeness

like on my list of totally underrated old guitars that and the harmony sovereign are like in competition for spots 1 and 2

I hope by this time next year I can actually participate in the guitar geekery rather than sitting by the sidelines going "I can play C, E ang G chords on my Gibson Riviera if you give me enough time to move my fingers"

guys i have something that haunts me. when i was a little kid my mom bought me this hagstrom SG bass that was SO FUCKING COOL IN RETROSPECT but when i was like 13 i traded it in to get this corny pearl white Aria jackson/kramer type clone bass

:(

JJ - bedell sounds cool! i will check them out online and come holla @ you when i have the extra scratch

One drawback to that: you have to replace the tubes every three months.

VW actually made a 2012 Beetle with a tube amp that they displayed at car shows, no production plans unfortunately. Looks cool though, complete with Strat-like sunburst wood trim:

http://hybridvehicle-s.com/wp-content/uploads/2011/09/1ce72__volkswagen_beetle_fender_concept_show_floor_205_2_cd_gallery.jpg

I bought a VW when they were giving away those First Act guitars (I like to joke that I spent $18,000 for a First Act guitar, but it came with a free car). Agreed about the awful intonation. The built-in preamp is nifty though. The point was to promote the new-for-2007 aux-in input jack intended for iPods but the preamp allowed you to play the guitar through the aux-in too.

As for the IPO, well, it can't be worse than being bought out by CBS....

ha we are also selling hagstrom now so i can fulfill all of your wonderful needs dude xpost

The built-in preamp is nifty though.

A friend of mine does noise/drone stuff and swears by his First Act VW (minus the car) because of the preamp.

It's also useful for processing Motorik beats...

http://www.hagstromguitars.eu/index.php?option=com_zoo&task=item&item_id=120&category_id=18&Itemid=12

it has switchable distortion thru the preamp too, so you can get fuzztone through the car speakers, and yeah when played through a real guitar amp you can get some coruscating riffage by combining the built-in preamp distortion with the guitar amp distortion

hmmm did not know that, that's pretty interesting

Rosewood fretboard, which I don't think the wal-mart First Acts have. The color of the pickguard matches the color of the car you bought.

huh i didn't know hagstrom was still going!

thats the fun part, no one does! this is the benefit of liking weird stuff and owning a store

Fender changes their mind, will stay privately owned

With the decline of rock music as a popular influence, teenagers interested in making music are more likely to spend their limited cash on computers or other electronics. The traditional garage band, the lifeblood of electric guitar sales, has given way to electro-pop made on a laptop.

hmmmmm....

Time to bring back the fender blender

Fender still shaky, and Bain's controlling interest in Guitar Center isn't helping, for some reason.

The Guitar Center aspect of Fender's overall financial strategy is significant, for sure. But I don't think people realize how badly Facebook's IPO really ruined it for any company trying to go public at the time, as exchanges collectively took a hit. (I will need to look up when I am work what companies were added to NASDAQ in May/June and see their performance before/after FB's launch.) Investors collectively balked at doing anything for a hot minute.

Also, I find the Times' argument of "kids and their laptops and 'Guitar Hero' these days" totally weak. I don't see anything wrong with kids wanting to play "Guitar Hero" and/or "Rock Band." Fender is never going to win over that crowd because what motivates a person to pick up a video game is completely different than picking up a real instrument.

I think the disappearance of music education programs in schools (and at home), combined with the actual cost of equipment, says more about it than anything else this article tries to suggest