http://bottomline.msnbc.msn.com/_news/2012/07/20/12857357-fender-goes-off-key-cancels-its-ipo?lite
 
... in a side note ... how many lame puns do you think an MSNBC writer can use in a news article?

"The other sticking point was Fender’s problematic relationship with Guitar Center, on which it depends for roughly 15 percent of its sales. Despite $2 billion in annual sales, the retailer is saddled with $1.6 billion in debt, $650 million of which carries a 9.9 percent interest rate."

What's shocking is that Guitar Center has that much debt...they're gonna have to sell a lot guitars to hit that nut.

Guitar Center was purchased by Bain Capital in 2007. It's fairly common for private equity firms to buy a company, take on debt for expansion purposes, then hope to sell the company at a profit, or at the least milk the acquisition's debts to pay back the cost of the purchase plus some
profit and then let it fold in on itself. 9.9 percent is only slightly above the average corporate bond rate. It's where alot of investors are going for safe bets with steady slow growth. 

I don't know that Fenders IPO was pulled because of GCs debt, but a more likely reason might be Fender is having issues collecting recievables from GC. If that's the case, they probably aren't alone. This could be an interesting next couple of years for GC and the retail music business. Try and imagine being in management of Fender, Gibson, Marshall etc. How do you strong arm the retailer who is selling 15% or more of your product when they are virtually the only game in town retailer wise? It makes sense for Fender to try and raise some cash for expansion in case GC takes a swan dive, but if the market won't buy enough of the stock nor pay enough per share, Fender is going to be looking for someone like Bain themselves. 

Randy

... how many lame puns do you think an MSNBC writer can use in a news article?

Sticking my neck out here, it depends on how in tune he/she is with developments or whether he's/she's just a highly strung nut using internet journalism as a bridge to pick up some readers in order to scale further up the ladder toward becoming a major player.  Either way it's likely he/she won't tone down his style at the expense of losing a greater volume of exposure. 

I suppose I see it less as someone using a chorus of lame puns and more like a solo player with a bit of drive using a nifty finger style and his/her own rhythm to amplify key points in order to get heard in such a big arena.  Don't forget either that the story likely just started as a bunch of slurred notes that he/she had to bend into something harmonious that could be pitched at an editor.

"it depends on how in tune he is with developments or whether he's just a highly strung nut using internet journalism as a bridge to pick up some readers in order to scale further up the ladder toward becoming a major player.  Either way it's likely he won't tone down his style at the expense of losing a greater volume of exposure."

 Martha C. White may have just been having some mundane and innocent fun while choosing a title for her face book post.

We all know Martha is using a female pen name as an alias. This is the internet remember Michelle?...

(Now fixed in original post, amended for universal gender correctness... )

Cheers for pointing out my oversight, nothing malicious intended. That'll teach me to bother to read the original article before I indulge in a bit of word-play in future...

Regards

Guy Chapman (aka Person Personperson.)

I think GC is in trouble because guys like me got wiped out by the housing, job and financial fiascos.  I had one year that I spent around $40k at GC (albeit buying everything for $2 over cost).  Now I only go there to get free Kaman guitar shipping boxes...

"Fender IPO dented by impending crash".

The entire market is not doing as well either, a lot of mergers were put on hold, acquisitions down, investment banks shedding jobs, LIBOR scandal in the UK, IPO's dropping off the charts.....

I don't care how you slice it, or try to justify it, $ 1.6 billion dollars of debt is obnoxious for a guitar store. Somebody is going to really get screwed.