Gibson selling Memphis factory

Just read that Gibson is selling its Memphis factory for a reported 17 million and that the company is over 500 million in debt. Just wondering how and if this may affect Gibson brands which I understand Cakewalk is a part of. Hopefully, no changes nor reduction in support and resources are forthcoming.

digimidi
Hopefully, no changes nor reduction in support and resources are forthcoming.

It's already happening, and it has been happening for a while now. Cakewalk's official support tanked around 2 years ago. Now Gibson is selling factories and firing C-level executives. Hopefully, they can still turn it around.
 
I get the impression Cakewalk is betting big on Momentum - https://momentum.cakewalk.com
 
Momentum is a tough sell, from my perspective, and I've been into mobile music making for a number of years.

Momentum could make the Sonar for Mac debacle look good by comparison...

You mean the $300 Chibsons I see on the net will be  legit now? Oh the irony.

Audioicon
Historically, and I have read comments from other forums about everything Gibson, they acquired entities, entity gets ruin and sold out to another entity. 

If there is a history then this simply tells me that there is a lack of focus on core business.

I would have been more excited if Cakewalk was acquired by some other company but the past is the past.

Cakewalk still fared better than Gibson's previous acquisition, Opcode. 

craigb
Wondered what happened to them!  LOL.

This is hilarious! 

ampfixer
I wouldn't get too focused on the debt issue. In my last day job, the division I worked in had an annual operating budget of 800 million dollars. That's what it cost just to run. The only time it becomes an issue is if they can't service the debt or their access to further capital becomes blocked.

With a Moody's CFR of Caa3 (one step above the rating of bonds actually in default) with a negative outlook, I would expect that refinancing might be difficult. It is likely that Gibson Brands will be restructuring well before this time next year. 
 
""We feel that Gibson's capital structure is unsustainable due to the uncertainty over its ability to refinance debt that comes due in July 2018 and August 2018 given its very high leverage and weak operating performance," said Kevin Cassidy, Senior Credit Officer at Moody's Investors Service. Debt/EBITDA is approaching 10 times. "Despite our expectation of debt reduction over the next year with the expected proceeds from asset sales, we think debt/EBITDA will remain high at around 8 times..." 
 
https://www.moodys.com/research/Moodys-downgrades-Gibsons-CFR-to-Caa3-outlook-negative--PR_371298
 
Whether Cakewalk will survive, either as a division under a restructured Gibson, or as a spun-off asset that is attractive to another investor in a relatively small and crowded music software market is anyone's guess. A lot would depend on how profitable it is, which is largely a mystery. 
 

Rain
 
Cakewalk still fared better than Gibson's previous acquisition, Opcode. 

And it doesn't stop there, there is Slingerland (Drums) run it into the ground then shut it down in a short time, had offers to sell it but declined and just let it sit there and rot. There are quite a few more examples which I have read about around the traps (can't recall them just now) it's part of the reason many people refer to Gibson as 'The place products/Companies go to die', or similar similar. I have read that numerous times in places.

digimidi
Just read that Gibson is selling its Memphis factory for a reported 17 million and that the company is over 500 million in debt. Just wondering how and if this may affect Gibson brands which I understand Cakewalk is a part of. Hopefully, no changes nor reduction in support and resources are forthcoming.

 
I imagine that some things that are too expensive have to go, and sometimes a factory is in a place where the jobs are too costly, and it forces the company to sell at a price that does not bring in enough revenue to cover.
 
In the end, I think that Gibson, over extended itself, and flooding the market with "named" instruments that only sell one or two, compared to other models, is likely the source of their problem, although it is probably better stated that it would be part of the problem.
 
I kinda think that the corporatization of America is what hurt the most ... supposedly this was going to put everything under one roof and save some money, and in the end, it made it harder because of the distribution process became even more costly all around. It probably didn't help that the music stores, many of which were locally owned, did not have a good return, and their investment in the Guitar Centers and other big superstores did not help them a whole lot, and I think that they stole more than they provided. I noticed a store here with used equipment, and I could not help thinking of Bitflipper (or someone else ... can't remember) having some gear stolen, and it being sold somewhere else, and the store not giving a poop about where it came from, and that it was stolen .. sell it quick so it's not our problem, kind of thing.
 
I really do not have an answer, and my only comparison point is the restaurant I managed ... as long as its owners were from Oregon and Washington, the company managed to make it just fine, but as soon as outsiders got in, for they had more money on hand, they killed the company with Monopoly money, and sadly, something that was good, and provided for locals, went away, to only provide to even fewer folks somewhere else ... the inevitable figure eight (JK Galbraight) of economics, was gone, and the money would not help the locals anymore. 
 
I am also thinking that what helped kill it and hurt it, is the wrong people managing it, and milking and stealing from the company in the meantime. As soon as greed enters the fray, you know that the timing is now limited. you can not live by greed alone!

DrLumen
Worst case is maybe they will sell CW back to Roland.  Nothing against Roland. Just saying that if things are bad then that might be an option.
 
Or, if CW's financials are good and a separate entity from Gibson, maybe CW could be spun off and then buy out some of the competition (Reaper, Studio One, etc) and consolidate the market.

Or maybe Best Buy will Acquire Cakewalk.
I just can't see the chemistry of Gibson and Cakewalk.

Totally mismatch.

 
A couple of years back, I was very much in the market for buying a (new) US Les Paul Standard. After some considerable research, I'd even tracked down a couple of 'last year's model' guitars priced to go at £1,499 instead of the list price of £1,899.
 
As part of deciding whether or not to pull the trigger, I really did dig around quite deeply into reviews and articles. I also sought the advice of me old mate James who owns and loves his (albeit not modern) LP.
 
I went and played a number of new models, as well as a 1970s model on sale (for a lot more than £1,499!) at a local guitar store.
 
When push came to shove, I just didn't feel like I'd be getting a guitar worth the sort of money they were asking - even at the discounted price. The '70s guitar I tried felt like a completely different and far superior brand to the new stuff, but I wasn't really up for spending that much.
 
I finished up spending a little bit more, but ended up with two US built guitars  
 
I managed to pick up - in relatively quick succession - a last-year-of-production US Deluxe Telecaster and similar US Deluxe HSS Stratocaster. As these were models destined to shortly be replaced by the Fender Elite range, they'd both been heavily discounted (to around the price of the Standard models in the range) in order to clear the shelves.
 
So for just north of the price of a US Standard LP, I ended up with two gorgeous (both tobacco burst/maple neck) US Fenders. I have to say (while conceding that hindsight is a wonderful thing) that I'm so glad I made the decision I did. And this is from a chap who's always wanted a 'real' Les Paul ever since I started playing back in the stone age.
 
 

In Canada every Les Paul I've owned or looked at seriously was over $5k. The standards are really hit and miss and those cost about $3k. They have become the Harley Davidson's of the guitar world. All sizzle and no steak. They think that past glory and hype will carry them. Min-E-tune and control wiring from computer parts bins don't match the image they portray. I can hardly wait to see what they make in China. 

Another interesting Gibson story I found when trying to find out more about this Garrison guitar I bought. There was little information other than the story of how they started in 2001 in Newfoundland and Gibson bought them in 2007 and shortly killed the factory.  
https://en.wikipedia.org/wiki/Garrison_Guitars
 
If they kill Cakewalk we can only hope that the boys wander off to re start a new company. 
They would not have to honour our lifetime updaates.