The Down Range Forum
Member Section => Down Range Cafe => Topic started by: alfsauve on May 09, 2015, 07:58:58 AM
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Not new news either, but it seems looming. Their, "haircut or a shave" hasn't played out yet, but it doesn't look good either way. Even if they can avoid liquidation, Chapter 7, a Chapter 11 reorganization will still not leave them that much better off in the long run.
So it's time to buy Colt. Not the stock, silly, but the guns.
I imagine especially the SSA's will become valuable down the road.
[Sorry, forgot the link]
http://www.thefirearmblog.com/blog/2015/05/06/colts-struggling-to-stay-afloat-bankruptcy-looms/?utm_source=Newsletter&utm_medium=Email&utm_content=2015-05-09&utm_campaign=Weekly+Newsletter (http://www.thefirearmblog.com/blog/2015/05/06/colts-struggling-to-stay-afloat-bankruptcy-looms/?utm_source=Newsletter&utm_medium=Email&utm_content=2015-05-09&utm_campaign=Weekly+Newsletter)
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They have been in financial trouble since 1836. Nothing new about mismanagement there.
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They'll manage to stay alive as long as the government needs them for the M-16 contract. FN and Remington produce only a small portion of M-16 parts and guns for the military. Tom is right. They've been mismanaged for decades. As long as they stick to the basics, (AR's, 1911's, Single Action Army's), and stay away from "Smart Guns", and disasters like the "All American 2000", their end product has always been good, just not the idiots running the place. Another one of their big mistakes was discontinuing the Python. Again, it was one of the few things they did right.
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Another deadline came and went with inclusive results. Some debt was restructured but not enough.
The next deadline is 5/18.
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So another week and it doesn't look good.
S&P debt ratings are officially the lowest possible, "D". Which means it's missed 1 or more payments and the company is on the brink of bankruptcy.
The company is trying to negotiate with the creditors but needs 98 percent of investors to agree. Guess what they have gotten less than 6% agree. (6% by principal, not number of debtors.)
Standard & Poor’s also gave Colt a recovery rating of “6,” meaning there’s a zero to 10 percent expectation of recovery in a default scenario.
http://www.guns.com/2015/05/21/colts-credit-rating-cut-to-the-lowest-possible/ (http://www.guns.com/2015/05/21/colts-credit-rating-cut-to-the-lowest-possible/)
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To put Colt incompetence in perspective consider what gun sales have been since Obama took office.
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To put Colt incompetence in perspective consider what gun sales have been since Obama took office.
A classic case of snatching defeat from the arms of victory.
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This is in line with my work experience.
It is never the people on the shop floor who ruin a company.
It is always incompetence in the front office.
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This is in line with my work experience.
It is never the people on the shop floor who ruin a company.
It is always incompetence in the front office.
Exactly. The company I served my apprenticeship with, and worked 16 years for, was started by the grandfather before the Second World War. The father took it over and built it up with good people into the multi million dollar corporation it became. Then, in the 80's the 2 worthless kids took it over after the old man retired. They closed their doors in 2000. It would have been sooner than that if the old man hadn't come back to fix it 3 times in less than 20 years.
He finally got tired of it, and told them they were on their own. About 5 years later they closed the doors, and auctioned everything off. That company made multi millionaires out of 7 separate families before those stupid kids got a hold of it. Just because your father is a successful businessman doesn't automatically make you one. Yet another good company that proved most family owned corporations die in the 3rd generation.
The company I just retired from is coming up on it's 3rd generation of same family leaders. I'm glad I got the hell out when I did. I just heard from a coworker things are slowing down, and there is talk of layoff's. I've only been gone 5 months.
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The only way Colt has survived this long is because buyers, mostly the Govt, has spent 155 years shoving money at them faster than they can mis-use it.
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Exactly. The company I served my apprenticeship with, and worked 16 years for, was started by the grandfather before the Second World War. The father took it over and built it up with good people into the multi million dollar corporation it became. Then, in the 80's the 2 worthless kids took it over after the old man retired. They closed their doors in 2000. It would have been sooner than that if the old man hadn't come back to fix it 3 times in less than 20 years.
He finally got tired of it, and told them they were on their own. About 5 years later they closed the doors, and auctioned everything off. That company made multi millionaires out of 7 separate families before those stupid kids got a hold of it. Just because your father is a successful businessman doesn't automatically make you one. Yet another good company that proved most family owned corporations die in the 3rd generation.
The company I just retired from is coming up on it's 3rd generation of same family leaders. I'm glad I got the hell out when I did. I just heard from a coworker things are slowing down, and there is talk of layoff's. I've only been gone 5 months.
Only mistake the father made was raising 2 worthless kids...and then handing them the reins to the company.
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Only mistake the father made was raising 2 worthless kids...and then handing them the reins to the company.
The sad thing is before all of this happened, he turned down a cash offer from GM to buy the whole company. They wanted to use it for an R&D shop to develop their die cast transmission case molds, which we were making for them at the time. They even agreed to keep everyone employed, and make them part of GM. He turned them down. Now he's turning over in his grave wishing he would have taken the offer. That's what happens when you bet on your not so smart kids instead of cash.
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I never could under stand colts company policies. by far they make the best preduction wheel guns, yet they stop making them. yes, I understand quality costs, but I have never met any gun owner that would not spend more on a gun to get a much better product.
maybe they are out there, I just have yet to find one.
PS yes I do know people buy stuff for things like a car gun or a beater, but I have yet to find some one that has said they like shooting my smith more then my colts. even my 629 v comp does not hold a candle to my python.
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....., but I have never met any gun owner that would not spend more on a gun to get a much better product.
Hmm, maybe you just hang out with the upper crust of gun owners. There was a time I wouldn't but have learned the error of my ways.
... I have yet to find some one that has said they like shooting my smith more then my colts. even my 629 v comp does not hold a candle to my python.
Actually there are a number (I won't vouch for their quality) of S&W shooters who have shot Colts and prefer S&W. Check any number of forums. Maybe they just haven't had the opportunity to shoot YOUR Python.
A guy next to me at the range let me shoot his Python. Only fired 2 shots because I didn't like the idea of wearing out a very high priced collectible. With only 2 shots I couldn't really say, but it wasn't overly impressive.
One problem Colt had was being late to the .44 game. And with a tight action I don't think they held up with lots of use. Plus most replacement parts required custom fitting. And custom fitting was the reason for the high cost.
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Side by side at the range, not met one yet. It really is not hype or cost. Just like a freedom arms sa is so much better then a ruger, just cost 3x. The flip side of that is my nylon 66 and marlin model 60 can out shoot a bunch of 1000 1022.
The crowd of gun owners I hang with are mainly retired, so they have extra income.
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Colt has been notorious for being over priced for 100 years. Civilian sales have not been their mainstay since the Lightning proved to be a piece of shit.
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Latest news from Reuters as of 6/9. Looks like 6/15 is the next possible bankruptcy date... unless something happens.
Colt is offering 45cents on the dollar with no equity to bondholders. Currently only 6% have indicated they'd take the offer. Sales fell 30% last year but they're predicting a 24% increase this year and next. Doesn't sound reasonable to me, unless they've got some rabbit they're pulling out of the hat. Maybe an AR with an internal recoil spring?
"Colt" won't be dead after liquidation. The brand name has too much value. Someone will buy it and resurrect the brand. The question is will it bring enough to pay off the bondholders more than 45%. I'm think it will.
http://www.reuters.com/article/2015/06/09/us-coltdefense-bankruptcy-idUSKBN0OP1YN20150609 (http://www.reuters.com/article/2015/06/09/us-coltdefense-bankruptcy-idUSKBN0OP1YN20150609)
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And so the headline from the WSJ today, 6/14, reads:
Colt Defense set to File for Chapter 11 Bankruptcy Protection Tomorrow
http://www.wsj.com/articles/colt-defense-to-file-for-chapter-11-bankruptcy-protection-by-monday-1434310925?KEYWORDS=colt (http://www.wsj.com/articles/colt-defense-to-file-for-chapter-11-bankruptcy-protection-by-monday-1434310925?KEYWORDS=colt)
You need a subscription to read the whole thing. Here's a summary from Truth About Guns.
http://www.thetruthaboutguns.com/2015/06/daniel-zimmerman/wsj-colt-to-file-chapter-11-bankruptcy-tomorrow/ (http://www.thetruthaboutguns.com/2015/06/daniel-zimmerman/wsj-colt-to-file-chapter-11-bankruptcy-tomorrow/)
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So following through on my suggestion. Here are 4 SSA's up for auction. I' feel that the best value is in the .45 Colt caliber. There are other calibers up for auction, but I like these four. Together they would make a great collection. They represent 1881 through 199x.
From 1881: http://www.rockislandauction.com/viewitem/aid/1025/lid/237 (http://www.rockislandauction.com/viewitem/aid/1025/lid/237)
From 1900: http://www.rockislandauction.com/viewitem/aid/1025/lid/263 (http://www.rockislandauction.com/viewitem/aid/1025/lid/263)
From 1900: http://www.rockislandauction.com/viewitem/aid/1025/lid/2266 (http://www.rockislandauction.com/viewitem/aid/1025/lid/2266)
From late 1990s: http://www.rockislandauction.com/viewitem/aid/1025/lid/4868 (http://www.rockislandauction.com/viewitem/aid/1025/lid/4868)
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So WSJ reports it's a done deal this morning.
http://www.wsj.com/articles/colt-files-for-bankruptcy-seeks-august-auction-1434367176 (http://www.wsj.com/articles/colt-files-for-bankruptcy-seeks-august-auction-1434367176)
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:(
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And here's the DRTV blog posting. Interesting in that they plan to sell themselves, sans the long term debt, to Sciens Capital Management LLC, assume secured liabilities and all liabilities related to existing agreements with employees, customers, vendors, and trade creditors.
All long term, unsecured loans, will be wiped out. Of course all ownership stakes will likewise be zilch as the company will be sold to Sciens.
They want to do this by 8/1, but I wonder if any long-term debtors will be trying to hold this up and try to get a piece of their pie back?
And I wonder if a dark horse will come forward with a different bid?
For what it's worth I threw some very low, dark horse, pre-bids out there on Rock Island Auction for some historic Colt SSAs. We'll see what happens.
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The fact that the company is being bought by a company owned by a guy involved in their financial problems makes me say "Hmmm ?"
Heres the Bloomberg entry on Sciens:
http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=92117
Company Overview
Sciens Capital Management, LLC is an investment firm specializing in direct and fund of fund investments. In direct investments, the firm specializes in middle market, mature, leveraged buyouts, and turnarounds. The firm typically invests in early stage technology companies, development stage technology, and non-technology companies. It prefers to be the lead investor or control investor and seeks to take a seat or observation rights at meetings of board of directors and board committees. Sciens Capital Management, LLC was founded in 1986 and is based in New York, New York with additional offices in Athens, Greece and Ontario, Canada.
Key Executives for Sciens Capital Management, LLC
Mr. Ioannis P. Rigas
Chairman, Founder, Managing Partner, and Chief Executive Officer
Age: 50
Mr. Daniel J. Standen
Partner
Age: 45
Mr. Gordon Buchanan
Partner
Mr. Farhang Mehregani
Chief Investment Officer of Sciens Alternative Investments
Mr. Christopher P. Meyering
Chief Legal Officer and Chief Compliance officer
Heres what they say about the Company founder, (NOTE that he has been involved with Colt since 2003)
http://www.bloomberg.com/research/stocks/private/person.asp?personId=197780&privcapId=20357950
Mr. Ioannis P. Rigas, also known as John, CFA, is the Founder, Chairman, Chief Executive Officer and Managing Partner of Sciens Capital Management, LLC. Mr. Rigas is responsible for investment selection and execution, portfolio construction, and monitoring, manager selection and development, audit and reporting, and realization of portfolio company investments. He is the Founder and Principal of the Sciens funds of hedge funds business. He serves as the Chairman, Chief Executive Officer and Managing Director of Sciens International Investments & Holdings SA and also served as its President. Mr. Rigas is the Founding Partner of Sciens Venture Partners. He has been a Founder at Zilkha Capital Partners and Member of its predecessor firms for 12 years. Mr. Rigas has been a Manager of Colt Defense LLC and Colt Finance Corp. since 2003. He has directed the Sciens Capital private equity team and completed over 50 investments in portfolio companies with aggregate value in excess of $2 billion. Mr. Rigas has broad experience in alternative assets including private equity, venture capital, structured finance and hedge funds. He has broad experience in the management of alternative assets including private equity, venture capital, structured finance, and hedge funds over a period of 16 years and found the Scienc franchise in 1988. As a Principal and Founder of the Sciens’ fund of hedge fund business, Mr. Rigas directs portfolio construction, investment research, fund operations, and risk management activities. He was employed at E.F. Hutton Group, Inc. Mr. Rigas serves as the Chairman of the Board of Asprey International Limited. He served as the Chairman of Advanced Interactive Systems Inc., and World Access Inc., since December 1999. He serves as a Non Executive Director of SAM Allocator Holdings PCC Limited - The Optimum Alternative Fund EUR Class, SAM Allocator Holdings PCC Limited - The Optimum Bond Diversifier Fund (EUR), SAM Allocator Holdings PCC Limited - The Optimum Equity Fund (EUR), SAM Allocator Holdings PCC Limited - The Optimum Alternative Fund USD Class, SAM Allocator Holdings PCC Limited - The Optimum Alternative Fund Reserved Class I and SAM Trading Holdings PCC Limited - Sciens Dynamic Trading CHF Class. He serves as a Director of Adhesion Wealth Advisor Solutions Inc., Advanced Interactive Systems, Inc., B3 Corp., New Colt Holding Inc., Omniglow Inc., and Total Sports Inc. Mr. Rigas obtained the first level CFA certification in 1991. He received a B.A. degree from Colorado College and studied at New York University as a Fellow.
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I just checked the RIA regional auction and I lost all my bids. Of course bidding $500 on a Colt SAA was just down right silly, but you never know and I had about 10 pre-bids in. All were easily surpassed by other pre-bids, mostly from Proxybid.
Miss Kitty and the check book both have issued sighs of relief.
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Continuing on with the price of Colt's. From the Rock Island Auction in June.
A Colt SSA 1st generation chambered in .32S&W. With papers. You read that right .32S&W. So the article says only a little over 30 out of 350,000 were so chambered.
Price? You have to ask you can't afford it. Gavel down at $7,475. Plus 18% buyer fee, Plus FFL, Plus Shipping and Insurance. I suspect when all is said and done, $9,500 from their safe to the buyers. RIA had estimated at the high end $7,000.
The following link is interesting in the value of the more prized auction items.
http://rockislandauction.blogspot.com/2015/07/top-guns-2015-june-regional-auction.html?utm_source=2015-07-10+TopGuns+of+1025&utm_campaign=2015-7-10+TopGuns1025 (http://rockislandauction.blogspot.com/2015/07/top-guns-2015-june-regional-auction.html?utm_source=2015-07-10+TopGuns+of+1025&utm_campaign=2015-7-10+TopGuns1025)