This morning, I ran across this article stating that Fender has filed with the SEC for a public offering of $200 Million. $100 Million of that will go to pay down debt; currently Fender has a debt load of $246 Million. The other $100 Million will be used to grow revenue.
Personally, I have mixed feelings about this. For one, I’ve seen and been involved with companies that have gone public. There’s nothing that kills innovation and creativity more than going public and having to answer to Wall Street and financial analysts’ expectations. Granted, those companies have been tech startups, and Fender is far from being a technology company. So perhaps this infusion of cash will help them. But the following excerpt kind of bugs me (not completely mind you, but it’s a bit of a concern):
With sales in 85 countries, Fender said revenue could get a boost from growing interest in guitar-based music from emerging markets like China, India and Indonesia. But it warned that increasing popularity of other types of music, such as rap or house, could hurt demand for its guitars.
Let’s face it: Asia is the land of cheap ripoffs and unabashed product forgery, so I’m a bit concerned about the expansion into the Asian market. However, that said, Fender has a great brand, and it can get a lot of mileage trading on that brand.
Don’t get me wrong; I really wish Fender well. I’ve got and have had several Fender products over the years, so yeah, I’m a believer. I only hope they’re not over-reaching and hope that they can maintain their quality by being traded publicly.
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