NY: Freedom Group IPO

[Squib Joe]

Cerberus forms "Freedom Group" consisting of firearms companies Remington, Bushmaster, DPMS, and Marlin (among others).

Form S-1 was filed last Friday, expect an IPO soon!

http://blogs.wsj.com/deals/2009/10/19/a ... dom-group/

[Pinnacle]

This is NOT an IPO that I would throw in on.

Here are the reasons why -

They need to raise cash to maintain the financing on the inventory that they already have - the market is FLOODED and velocity is slow on items at the moment. The market prices were over inflated due to panic buying and now there has been a correction and national unemployment is headed for an all time high (well, we are there at this time I fear).

The wholesale price of guns is falling - the retails are falling, and the margins are shrinking. P/E Ratios are falling with the differential in cost of retail/wholesale and existing inventory (loads of it) has been devalued due to market correction. The boom is over and the bubble is bursting.

Case in point - Ar's 6 months ago were going for huge cash - $1,200-1,400 retail - you can now buy them for $700-900 direct from wholesalers. You tell me - Is now the time to take a swing at a market that is in decline and is directly related to the rate of employment? (the DPMS Sportical was $599 when released - at peak they were $1,200, now a CMMG M4 fully loaded is only $729.00 from CDNN Investments) (Another example - Lower receivers were going for top dollar - $175.00+ now they can be had for $70)

Seems like a no brainer to me - I think that they are in trouble and need cash to maintain - I do not see a ROI anytime soon.

Used Market is Flooded with guns of this type and people are dumping them for fast cash. Not a market to invest in.

[Squib Joe]

I buy stock based on the future market, not the present. If this comes out undervalued I'll be all over it.

[Pinnacle]

I buy stock based on the future market, not the present. If this comes out undervalued I'll be all over it.

I understand that and it is a good business to do that - however, I don't see the market coming back for quite some time. I would rather not tie my money p on a bet that may not return based upon my personal forecast.

I don't see the gun market recovering from this situation anytime soon.

[Norsesmithy]

I'll probably throw in a little, if it comes out low enough.

I'm 22. I don't need the stock to go big for another 30-40 years. I can be patient.

[mday]

+1 on what Pinnacle said.

Remember that Cerebrus is the equity firm that had a large hand in running Chrysler in to the ground. they also own GMAC, which isn't exactly going well. Remember Mervyn's clothing store? That was Cerebrus too. After they royally **** those up, I have little faith in their ability to manage a company (and it's assets) well.

[Dick Unger]

They already own Freedom Group. Why do you suppose they want to sell part of it to you at an undervalued price? It's not like they need money to build a new factory. They'll take your money, and invest in something else. They don't want to manage a company, they want to have control, so they can manipulate the stock, and make money that way.

[DeanC]

They already own Freedom Group. Why do you suppose they want to sell part of it to you at an undervalued price? It's not like they need money to build a new factory. They'll take your money, and invest in something else. They don't want to manage a company, they want to have control, so they can manipulate the stock, and make money that way.

We have a winner! (says the guy who actually works in the industry )

[shadeslanding]

Back in 2000, I pulled my money out of the market (401Ks) and invested in two things: Guns/ammo and land. The guns and ammo worked out fine... the land I purchased has actually gone up a bit based on land values and sales around it. Not much - but enough to keep me happy.

I like Glen Beck's thoughts and may need to expand my portfolio. Beck says invest also in alcohol. If there ever were a collapse of society, you can always use it as currency.

Reminds me of the Y2K non-disaster though. I was in a Radio Shack around Christmas of 1999, and two employees were talking. I heard one say "Yeah - I picked up my generator yesterday so I'm all set" and the other employee responded that he had just finished stocking his food shelves for the big event. As they rang up my purchases one said "So have you taken any precautions for Y2K?" And I said "Yes. I purchased some 20,000 rounds of ammo." The one employee looked surprised and said "20,000 rounds! Why so much ammo?"

I calmly said... "Well let's see... you have the generator, and you have the food. I have a gun and ammo. Who do you think will have power, and eat well?"

So my investments remain: Guns, ammo, land and perhaps alcohol. All we need is the chips as they say!

GS