Billabong reduced to a ripple
Billabong today anounced that it had begun exclusive talks with one of its takeover bidders, ex-head of its North American division, Paul Naude, and his backers, Sycamore Partners. The move is a sign that the torturous and tedious Billabong saga is finally drawing to a close. The deal, if it holds, will see Naude acquire the beleaguered company for $0.60 a share valuing Billabong at just $287 million, a paltry sum for a once-mighty company worth $5 billion only five years ago.
It's been a tumultuous twelve months for Billabong. After its infamous retail expansion plan went awry Billabong have rolled from disaster to disaster with a series of profit downgrades interspersed by a fire sale of one of its most profitable labels and a desperate capital raising measure. All the while their shares kept tumbling, last month dipping to a then-record low of $0.63 and forcing the company into a temporary trading halt.
In just over twelve months Billabong received six takeover offers. The first was last February when TPG Capital made two takeover proposals. TPG offered $3.30 a share yet Billabong founder Gordon Merchant, who owns 15% of the company's shares, rejected the offer, famously stating that he wouldn't accept anything under $4 a share.
Shaken by the threat of takeover Billabong embarked on a major restructure. Newly minted Chief Executive, Laura Inman, announced the closure of 150 stores and partial sale of Nixon watches. The Nixon deal netted Billabong US$285 million which they used to reduce debt. Billabong shares began to rally.
The celebration was short. By June their debt was again ballooning and Billabong was at risk of breaching its bank obligations. This time it appealed to its shareholders to buy new shares at a deeply discounted price in order to raise $225 million.
In late August, Inman presented her four-year plan to allay Billabong's slump and return to positive sales growth and increase its earnings. The plan included a range of measures with a key focus on simplifying the business – Billabong had 25,000 clothing styles, each in various sizes and colours - while improving its supply chain.
In September, six months after they last showed interest, TPG were again bidding for ownership with an offer of $1.45 a share. This time they had competition from another private equity group, Bain Capital. Within weeks Bain Capital had been frightened off by what they found in due diligence. TPG lasted three weeks longer and exited talks in October. Speculation surrounding the bids caused the share price to slide further.
In late December, Billabong had a surprise suitor in Paul Naude. The long-time Billabong employee took leave from his position as director and executive to work on the bid with the backing of Sycamore Partners. They were offering a reported $1.10 a share.
By mid-January a bidding war had begun with VF Corp, backed by Altamont Capital Partners, also bidding on Billabong. While the two parties were conducting due diligence Billabong revealed two downgrades to their full-year earnings and the takeover process appeared to falter. Rumours of bids as low as $0.50 a share began to emerge.
Today's announcement that Billabong is entering exclusive talks with Naude ends those rumours yet the reported sale price of $0.60 a share still sets a record low transaction for the company. It's shaping up as an ignoble end to Billabong's publicly traded presence. If they are to take anything positive from the sale it's that a Naude/Sycamore takeover will spare them the opprobrium of a dissection and sell off.
Unlike VF Corp, who, if successful with their bid, would've split the company selling its subsidiaries whilst retaining only the Billabong label, Naude intends to preserve the current company structure. It is likely, however, that Billabong will now move to the United States as Sycamore Partners are based in New York while Naude lives in Califonia. The new owners will want the company nearby as it undergoes a significant and costly transformation.
How that transformation affects the wider surf industry remains to be seen. With a surfer in charge there's a good chance the current marketing status quo of sponsored surfers and licensed contests will remain in place. Yet the degree of Billabong's involvement in surfing will almost certainly be curtailed as Naude and Sycamore Partners reduce their cost base.
Since late 2011 Swellnet has covered this story with multiple articles all of which received considered and insightful comments. Those articles (with comments attached) are: Billabong: The Headline act in need of support Billabong: The Hunter Getting Hunted Billabong Recovery begins with discounted shares
Comments
Thanks Billabong and Gordon for the ride over the last 40 years. The Billabong Challenge videos/ DVDs and Jack McCoy collection movies are masterpieces. My first surf T shirt was a Sam Eagen in the late 60's (merewether boy) but always loved the Billabong ethos " only a surfer knows the feeling" Should I invest some of my retirement funds in the next Billabong adventure?
It's not a done deal yet!
http://www.smh.com.au/business/billabong-moves-closer-to-takeover-deal-2...
Stu, this is very well written and makes me a little sad. You've covered this saga well up to this point. I hope Billabong can survive but it's such a shame that if it does, it will move offshore.
A good mate worked for Billabong and loved his job, he had to move on. I feel for the employees and their families. I myself have always liked Billabong gear and I really like their wetties, especially the real coldwater suits which I need.
Sad for Gordon Merchant to see his lifes work down the shitter. You wrote a long time ago that he must rue the day the Perrin bros. walked through his door. I couldn't agree more.
"The A$287 million proposal from the Sycamore-led group values Billabong at little more than the A$225 million it raised selling new stock to shareholders last year. That’s less than the A$289 million value put on its inventory of clothes and accessories as on Dec. 31, according to the company’s most recent balance sheet".
Wow. Talk about a haircut.... Who ever thought owning script in Billabong would be worst than banking in Cyprus?
More detail.
http://www.smh.com.au/business/billabong-mulls-takeover-20130409-2hjfg.html
Let's just consider what else could happen from here.
Imagine if after the ten days, the deal doesn't go through with Naude/Sycamore. Would Billabong then consider the 50c offer from VF/Altamont? Would their offer still be on the table anyway?
And if neither option went through, then what - I presume we'd be back to Laura's four year strategy. I wonder how the share price would fare through such a scenario?
I'd be astonished if this Sycamore deal isn't done, Ben. Especially if the reports that Gordo has given it the green light are true.
I just can't feel sad or bad for Gordo. Greed got him to where he is today.
I feel bad for another australian company -- if this deal goes through -- being bought out and based offshore (California, where Naude is from & lives).
I saw someone on twitter highlight the fact that ZoSea bought the ASP for nothing, and now another american interest buys the bong for next to nothing. Surfing sure seems headed to be based in the US of A for the next extended period of growth.
It's a crazy time, when you think back to the 90's, all of this was inconceivable ...
Yeah, I dunno, I'm kinda with Zenagain on this one - I do feel a twinge of sadness at Billabong's predicament. I guess it's a generational thing and ZA and myself are of the same era.
In the 80s surfers supported Billabong and they supported surfing, and we - at least the grommets of the era - soaked up all they offered. Surfing was much smaller then, there were no freesurfers, only one tour and it was decided by a Top 16, so the feedback loop was also much smaller. It felt like you were closer to the source of what was happening.
In hindsight it was inevitable that Billabong would grow and the distance would widen, a certain amount of growth is necessary for businesses to stay alive. But that growing chasm spawned accusations Billabong had 'lost its soul', 'ignored core surfers' and all the rest. They all contain some element of truth, Billabong had grown beyond a size we could relate and it was only sponsorship or surfers and contests that kept them relevant.
The 90's Braithy? I reckon it was inconceivable back in 2007 when BBG shares were trading at eighteen bucks a piece.
@braithy what do u mean re greed got gordon where he is today ? i think merchant hung in there purely on emotion, maybe a few bad decisions.... i wonder do the merchant knockers know that he has donated millions of his own money to skin cancer research in the last decade which has in turn probably saved many lives. yep from the 90s who would have thought it would turn out like this . merchants plastics company seems to be travelling well.?
What a crying shame that this iconic Australian Surf Label is contemplating selling off it share holdings to a US company for what really is peanuts.
I wish Billabong stick to their four year plan and ride through the GFC hardship and keep this great company where it belongs in Australia.
No sympathy. You play the game you take your chances. Sorry udo, but, regardless of his donations to charity, it is hard it imagine what motive other than greed drove the endless quest to make more money. The good of the sport? I don't think so, not when his marketing played a significant role in the over-crowding of every accessible surf spot on the planet!
I don't feel the slightest bit of sympathy. Sure Perrin didn't help the matter but it was his decision to go public and turn him super rich instead of just plain rich. It's been a company that has clearly had poor strategy for a long time. Clearly not accepting $3.30 a share and holding out for $4 has caused all existing shareholders to lose a truckload of money when the results including the latest profit numbers should have pointed to $3.30 being a great number.
I wonder if the Billabong experience is part of the reason Rip Curl have never gone public. As soon as you go public, you lose the ability to make your own decisions and become accountable to other parties.
Stu,
There was a comment on Surfing.com recently that you might like.
"In the 80′s when the Surf Industry was still a cottage industry, and surfing a “counter-culture†pastime, most of us banned together under the rallying cry of “Support your local Surf-Shop.†The dream was to surf as much as possible, and for some that dream went further. To make a living through their beloved sport of surfing. As a tribe we supported those who pursued these ends through our purchase power. Spending our hard earned money on the local shapers, local surf-shops, and surf brands rather then on the establishment and the mainstream and the mall retail outlets.
But then the dream became a nightmare for the rank and file surfer, as the cottage industry grew into the Surf-Retail Complex. The big 3 (Quiksilver/Rip Curl/Billabong) morphed from “living the dream†into a perverse “mainstream the sport to increase the market and make corporate style profits†model. Surf branded crap is no longer exclusive to surfer owned (chasing the dream) establishments such as surf shops. Rather it has proliferated into the corporate structure of malls… Pac-Sun, Nordstrom’s, Mervyns, Ross, etc… Surf branded crap is also no longer exclusive to surf rich areas. Rather it can be found everywhere these days, Phoenix, Chicago, Seattle, Des Moines, etc…
This effectively means the Surf-Retail Complex has not only sold out their core market, but additionally they have marginalized the profitability of those “chasing the dream†surf-shop owners. Surf-shops aren’t failing because of a world economy undone by greed and predatory lending. They’re suffering because the product can be obtained cheaper elsewhere.
All this resulted in a popularization of surfing as not seen since the 50′s “Beach Blanket Bingo†era. This combined with the convenience of surf-forecasting and our surf breaks are now dangerously crowded at the hint of a waist high swell.
We are not skateboarding. The demand for waves can’t be supplemented like the demand for skate-able terrain was in the 90′s and beyond with the proliferation of new skateparks in every-town USA. Surf-breaks aren’t being created in every city, by the profiting surf-companies, under the same model that the skate industry gave/gives back to its market because its not feasible. The result is overcrowding at our surf-breaks, and a core market that is resentful of the Surf-Retail Complex for creating this situation. Especially when they rub in our face their ability to take expensive boat and surf-resort trips to avoid the situation. “Crowds? What crowds? I just got back from a week in the Menatawi’s, and couldn’t paddle fast enough to get back out to all the unridden waves rolling through!â€
When is the Surf-Retail Complex going to accept the fact that they are failing because they turned their back on their core market in an effort to capitalize on mainstream profits? When are they going to except that they got greedy, and got too big for their own good chasing a fickle fad-motivated mainstream. Real surfers have lodged a silent protest by refusing to support the whoring (buying your needless overpriced product) of the Sport of Kings."
Braithy,
Long ago Stubbies, JimyZ's, and Ocean Pacific was the be all and end all of all that is surfing. Yet, when the lot of 'em had financial problems, and when OP filed BK, the world of surfing didn't t end did it?
The 90's? Pfffft..... Times and things change. Who here is still rollin' with Windows 95 or Windows NT on their computer?
Let alone on their smarty pants phone?
From Surfline "Sad news surf fans, the Billabong Pro at J-Bay will not be held this year (or maybe ever again)." The timing might be a coincidence but I reckon we'll begin to hear more of these reports. Shame.
A quick squiz on the ASP World Tour website confirms that TTBB.
So right now it seems there are three confirmed ASP Mens World Tour events (Rio, Tahiti and Pipe) plus one 'tentative' Mens Star event in Japan (Billabong Pro Tahara), and two Junior events in Basque Country (Billabong Sopelana Pro Junior, Boys and Girls).
There are no ASP Womens World Tour or Womens Star events.
Ben, I assume above you mean three confirmed "Billabong" ASP Mens World Tour events? There are other non-Billabong confirmed events on the ASP Mens WT.
Channels nailed Gordo's predicament. He decided to go public and get filthy rich. He invited the devil into his bed etc etc ... and his motive was greed.
@ stu I mostly wore billabong as a kid. Use to get given boardies and wetties and a few stickers for the boards from about 14 to 18 years old too.
But slowly Billabong has eroded any feelings of sympathy I might have otherwise had for them. The simple fact is, in 2013 they aren't the same grassroots company they were in the 80's & 90's. They chased global domination, exported manufacturing to china where a Tee would cost $3.00 to make and they could sell it for $50, only to have the stitching fall out and the shape go to shit within about five washes due to zero quality control.
They stopped giving a shit about their customers and surfing the moment they became obsessed with profit margins and ridiculous wealth and corporate takeover after takeover ...
Even being bought out, I can't imagine them being able to trade under the name billabong. Too much ill feeling and bad history toward the brand name. Consumers tend to have a long memory.
http://www.smh.com.au/business/billabong-plunges-as-takeover-nears-20130...
.....and further down.
Already bottomed out at 51c!
Hmmm. Dunno about the greed hypothesis. Delusions of grandeur, hubris and disconnection from the core business and core support base, absolutely. Shit advice from Perrin. Terrible lapse in rejecting $3.30, although acceptance may have ended in ugly lawsuits anyway, given that BBG's recent performance would have raised huge doubts about adverse change warranties required as part of the sale.
Brand Bong can still make it back from the edge of extinction with Naude at the helm. Albeit with drastically trimmed sails, though. Not necessarily a bad thing for surfing and core surfers - we need to wear something, and I like watching pro surfing.
The other brands will be spun off, methinks; this is where Sycamore can make the quick killing that barbarians look for.
A real loss for the Goldy, though, I would have thought. Not a lot of spare employment going around up there.
Rough maths here but they sold half of Nixon for $280M or so, yet 60 cents values the company at roughly $280M as well. So essentially Naude will pay for Nixon and get all the other brands for free?
Well, not quite as simple as that but, suffice to say this, if Naude succeeds, he will get BBG for less than the current value of its inventory.
PS. Nixon's not doing too good: this extract from BBG's interim results: "In relation to the investment in Nixon ..., based on the current forecasts of the business and having regard to the differential capital structure referred to in note 7 of the half-year financial statements, the Group has written down its investment in Nixon ... by $106.6 million to $29.1 million being the expected recoverable amount."
Jeez, that's a bad run. At this rate I'd be confident of a two week flat spell descending on Tahiti mid-August.
Greasy's Greek Tragedy!
In which our tragic hero suffers serious misfortune which is not accidental but significant in that the misfortune is logically connected with Greasy's actions. The tragedy stresses the vulnerability of all human beings as Greasy's suffering is brought on by human actions, yet Greasy's suffering is undeserved with regard to its harshness.
@Patty. And if you could just bring yourself to work with him (ply him with meds and gin), I know a Hollywood hack who could write the screenplay for yer. A sure-fire blockbuster!
I am suspicious of the whole deal. Take a closer look. People usually earn their nicknames.
You and the barbarians both, BB. Must almost be a record amount of time they've taken to complete due diligence.
All the comments here indicate that company was under valued at 60c. I can see how certain people might benefit in the longer term from a fire sale now.
But isn't the value of a company whatever someone is willing to pay for it?
Yes, but that can change very quickly, which is my point. The main thing which has drawn my attention is the insistence that Merchant takes scrip not cash and that there is a relatively small amount of scrip available to others. Add to that the fact that the deal is being put together by a previous executive who has, presumably, had a long term relationship with him and I begin to wonder what the long game is. Billabong2?
Collusion? How does that fit with the other barbarian's offer being 20% less than Sycamore's? Isn't it more likely that they just want Greasy sidelined and tame, and all the institutional rabble rousers out?
I am not suggesting collusion or anything unethical just that as commonly happens in these deals it will be the small share holders who take the biggest loss. If you want to sideline him why give him a whopping parcel of scrip? It would have made more sense to make it a condition that he take the cash. What I see is a company with Merchant and Naude having significant input to a new business plan that aims to rapidly rebuild some of the brand value.....Billabong2! If it goes ahead it will be interesting to see where the other 8% ends up. Selected former associates who still hold stock?
Hmmm, I see it from the diametrically opposed angle. The overwhelmingly dominant shareholder in NewCo will be the consortium, with 75.1%. The maximum holding that GM can have in NewCo is 14.7%, less if more BBG shareholders want more than the 24.9% on offer.
It's unclear what, if any, equity Naude has or will end up with in NewCo, but I don't think that he will be asking for GM's input into any business plans.
Sycamore is banking on GM wanting to recover some of his fortune by throwing his lot in with it, but is hedging its bets by paying him in shares, just in case something was overlooked in the due diligence process.
Best of all worlds for Sycamore; the least worst of a bundle of really unpalatable options for Greasy.
The smh article implied the 8.9% was the upper limit. It is probably just my suspicious nature but I know how competitive these guys are. You were right before when you said that it's not just greed, status is a huge driving force. Who can pull of the sharpest deal, who dies with he most toys, that kind of bullshit. 15% seems a pretty significant holding to me particularly if that unallocated percentage goes to friendly interests......but your scenario is probably correct. I might be judging their ambitions and egos by where they were way back when.
At 50c a share I'm buying $500 worth tomorrow. It's one of the original surf companies, that can't be recreated. They've had a bad few years but I'm prepared to put my money on them turning a profit in a few years, albeit nothing like before... but that can only be a good thing...
My understanding is that if you buy tomorrow you are locked in to sell at 60c if the deal goes through. It could be a a quick 20% return!
If...
There are some very pissed off instos that must yet be convinced to absolutely burn the value of their clients' shares.
The Sycamore offer is almost insulting. But it's the best going around.
Accept one and lose money. Accept the other and lose more money. Accept neither and risk the ship burning to the waterline - there may not be enough money coming in to keep from breaking banking covenants. And there's no more to be got from a now-deeply sceptical market.
'@ Victor, sell, still some good profit left in Billabong at 83c if you can short it. Buy? Why? What for? It would be like gambling on a 45 degree heat wave in Tasmania in winter. Over 95% of people lose money in the share market. Rule one, never to be broken, never, ever, ever trade against the trend. Over 95% of people say no worries we'll never, ever... hold it!!! Shit, its going that way, lets go the opposite, it surely has to change now, imagine how much we'll make, quick, we better get in now before we miss out!!! Ahhh shit!!! Oh well, its only money, we can afford to give it away.'
'And so goes the world of the average stock gambler. Coming in on a wing and a prayer. Crash and burn, or please God help us, maybe heroics. Let the games begin. Clutching at the next announcement, the next company report. The next open. Surely they wouldn't lie?
Only the price, only the market doesn't lie.
http://www.google.com/finance?q=ASX:BBG
For five years the price, the market says emphatically down. The trader, sees down and acts accordingly. The gambler, prays up, and acts accordingly.
Enter the world of the gambler.
http://file.oltiv.org/uploaded_images/shooting-prayer-782298.jpg
http://cdn.greenandgoldrugby.com/804F73/gagr/wp-content/uploads/2011/08/...
http://images.theage.com.au/2011/11/08/2758618/main_fund_managers_201111...
Still, you never know. The gamble just might pay off. Jamie Obrien, with broken legs and the flu, just might get the barrel of the decade at 3 foot sea breeze Middleton, on a dying swell. Shit, hows the odds, we'll take it... its only money, we can afford to burn it.
Again though, you never know. Best be prepared.'
Only the price doesn't lie. The rest is nothing but conjecture. Floating a company is a double edged sword. Suddenly, anything, utterly anything, can happen. Ridiculous things can sway the price, which has a huge effect on perception. Just as greed can and regularly does create a perceived value for literally nothing, often merely a hyped up four wheel drive with a theodolite and staff, along with the comical hullubulloo about why it is priced that way, someone waking up with a hangover and a sudden debt, needing quick cash, can cause a rush of fear, and a sudden price deflation, along with the comical hullubulloo explaining why, and a whole new perception. Fear is more powerful than even greed.
The only truth that can be trusted, the only thing that can be relied on is the price. To truly know why, you would need to be a mind reader.
https://www.google.com/finance?q=ASX:BBG
Late 2007 was the big turning point, the signpost, the crystal clear reasons to short, to look at Billabong as a sell option only. Why? Who knows, its unknowable, and irrelevant in the scheme of things. Since then, the signs are clearer and clearer.
Unless you like expertly discussing nothing but conjecture.
And until something reliable, the price, says otherwise, the ripple can easily become a lake. All up to the fickle public and their perception, which will be the thing that sets the price.
Still there's heaps of 'traders' and market/company analysts around. Pretty much every man and his dog. A lie detector test would quickly reveal however that most of them have never actually traded much, and barely any of those that have, ever made a living doing so. So they are wisely and sophisticatedly guessing, gambling at best. Educated guessers, that's the professional, expert looking term.
Braithy, you mention companies being based in the USA for the next extended period of growth, but does that "period of growth" really look like it's coming? Seems like the guys with greed (your word, I agree with it) sort of played out the brands. Seems to me the best days for these companies are over.
@evand
You are right and I agree with you 100%, as far as growth for the surf brands/ companies goes. It has presumably peaked and will now decline to a point where the brands themselves have to shrink to a more maintainable level.
I can see; Less retail stores, less sponsored riders -- ie more quality riders, less staff, more online presence -- lower overheads, focussing on their brand, their now reduced core people and the quality of product rather than mass produced junk.
I think where the period of growth lies is... More people are learning to surf, than are giving it up. More boards are being made now than at any other point in history to keep up with demand.
This is where non endemic brands are looking to tap into surfing as well.
So while the old core brands maintain, look for other companies to get involved and "grow". Land Rover and Ford are the hot favourites to host the australian leg of the 2014 WT under ZoSea. There'll be other companies lining up to do the same at every destination on the tour, I'd imagine.
Surfing is a billion dollar global industry. imo it won't be monopolised by the big 3 or 4 "grassroots" brands -- Quik, Curl, Bong, etc but rather, shared around.
People making surf hardware and boards will grow. I haven't had a surf in the last 6 months where half the people in the water around me aren't riding Channel Islands, JS, HS or Firewire. Those shapers must be making a good life for themselves and their families.
Surf schools, high performance centres, surfing tours & safaris, surf camps etc ... they will all continue to grow too, imo ...
So within the industry itself there are pockets of mass growth and as exhibited by Bong, mass loss. It's a funny old, yet highly interesting, time for us.
A billabong is a pool of water that has been isolated when the river changes course.
Seems their choice of name was fairly apt.
Gordo must think about the day Matthew Perrin walked into his life and want to bang his head against a reinforced brick wall. The way Perrin led billabong went on its acquisition rampage was f.... ridiculous. Like kids in a candy store they gorged themselves on high priced sweets with someone elses money without ever thinking of the consequences. I remember watching the asx announcements flash across my trading screen when bbg acquired a new company... it was almost like a daily occurrence. The stock kept running on crazy multiples such was the frenzy in the market before the GFC. I would walk through the surfers paradise billabong store on the weekends and shake my head at the $90+ cost for boardshorts and think who buys this stuff. I had many conversations with friends about the questionable business savvy of bbg management at the time but thought they must know something that I don't. I made a few surf trips to angourie and watched gordo's mega mansion being built. I said to a mate...surely this guy has lost his mind. Perrin certainly seemed to when he left bbg with millions only to lose it trying to make more. Listing the company was the worst thing they could have done. The stockmarket is a ruthless place and constantly demands profit growth and yeild from such a stock. Bbg delivered early in its public life and became a market darling but then got bitchslapped when it started to fail on those demands. If Naude succeeds in the acquisition I hope he can turn it around but even if he does it looks like the Gold Coast has lost yet another major company because of greed and poor management.
Looks like there are a few punters looking for a quick profit.
http://www.google.com.au/#hl=en&safe=active&sclient=psy-ab&q=billabong+s...
To anyone is in that game, i wish you luck with the speculative arbitrage.... The future is elsewhere.
So you build a really heavy surf craft with a motor in it that performs worse than any existing unpowered board and you think that's the future? Scary thing is you are probably right. Anything that reduces the skill level is likely to succeed.
Maybe so, B-Boy. But in that vid didn't Jamie O seemed to sum it up pretty well?
And In the not too distant future there will be cars that drive themselves.
Still a lot of punters at 53c
http://www.google.com.au/#hl=en&gs_rn=9&gs_ri=psy-ab&cp=16&gs_id=1q&xhr=...
Some comments are good, but when we get to the nuts and bolts Aussie companies are coming and going. Rip Curl was the last of the big three to move their manufacturing off shore in 2002..cheap labour, profit margins increase ten fold...you can go online and buy Quicksilver boardies for half the price from the States with postage delivered to you at home as compared to what you pay here...look at the Aussie companies that are owned by American companies? most iconic Australian brands are American owned, profits go on and sales...some years ago I did due diligence when buying into this surfing industry, I walked away.
Who remembers Crystal Cylinders??? they disappeared back around 1980, did some research on this brand, Rip Curl bought it years ago and are sitting on it..
Here's an interview I recently did for ABC Radio National about Billabong. Even quote one of the comments above at the end of the interview (thanks Dave!):
http://mpegmedia.abc.net.au/rn/podcast/2013/04/lst_20130412.mp3
Good stuff stu. I think the fracturing of surfing culture that you refer to was always there to varying degrees. From day one there were a lot of people who did not like the way the industry chose to go. The difference now, as you suggested, is that all those people have a voice. From my perspective, the fact that it came as a shock shows just how out of touch they were.
One of the issues that maybe hasn't come through strongly is the incredible stagnation in fashion design that has come over the whole surf clothing industry. They have gone from fashion leaders producing well designed, good quality clothes to clones producing poor designs of average quality and that includes all the young creative companies you talked about. So in the end it may just be the simple fact that their non-surfing competitors stole their market with better quality goods!
NIce job, Stu! Thanks for the linked interview. The stuff on former Prime Minister Thacther was well worth the listen as well.
There's nothing as fickle as the fashion/clothing biz. Fluffy hair styles,blazers and pocket squares are still waiting on a comeback.... Ever changing moods.
Still, your observations about opinionated people on social media being a root cause is more than a bit flawed, as BBG is the anomaly.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&instty...
Speaking of anomalies, wondering why there was never a mention of the Andy effect in all of this?
On a second note, there's tons of worth in some of them BBG divisions. I suspect some involved with the bidders have their eye on certain companies.
DaKine has clout and massive value... And RVCA is massively popular.
Thanks BB. The stagnation you speak of is, in a way, kind've understandable; the surf industry had it very good for a very long time. Surfing, it seemed, was inherently cool and people wanted to wear the duds. Perhaps that bred a lackadaisical attitude in their fashion and business depts?
@Roller - What's the Andy effect?
"Billabong may lose $960m in takeover":
http://www.goldcoast.com.au/article/2013/04/10/450082_gold-coast-busines...
Stu, Look at the earnings and income of everyone but BBG. Check their difference in stock price performance.... BBG fully stands alone.
Unfortunately, Andy died. Do you think that quite possibly that had some sort of add on/after effects with the company?
Togs. A tough, competitive business. Which works quite well in favor of the consumer.... Fashionistas are fickle. And the new crop of fashion forward cool folks have been raiding their grandparents closet, shopping the thrift stores for quite some time now.
http://photos.dailynews.com/2013/04/coachella-2013-fashion/#1
Considering everything previously stated here, business will continue to move forward, successfully.
http://photos.dailynews.com/2013/04/coachella-2013-fashion/#1
Stop the world!
If that's where we're headed I want to get off. I can't do it no more.
Brathy,
g'wan... get off on it all. as it's nothing but pure food and opportunity for top shelf writers like yourself... the world is not about to stop. so go and create something entertaining from all of this. you know you can if you want to. just look what someone else did with an old Kiss song.
Any advance on 50c? If you think the deal is going ahead now is the moment! A swift twenty per cent is pretty good! Me? I keep my money in my pocket.
https://www.google.com.au/search?q=billabong+share+price&ie=UTF-8&oe=UTF...
Looks like it could drop below that 0.50c mental barrier, not many people ready to jump in still with the possible 0.60c offer.
Go with the movement. Don't fight it. Is this what you're telling me Roller?
Tomorrow I'm going to the op shop and buying two knitted cardigans. Then I will stay up all night sewing them together to make a pair of pants. Just in time for winter.
Photos to come.
yea Brathey, don't fight it, let it flooooow.... one never knows what peaks the creativity.
and apparently you are right in the mix, as pre owned knitted sweaters could be it.... but, there's no need to pull out the knitting needles. do as other creative folks have done.... use your imagination instead.
http://www.regretsy.com/2010/01/29/and-the-winner-is/
http://www.regretsy.com/2010/01/29/skants-skants-revolution/
I'm a little deflated that the cardigan idea has been done before. It seems these hipsters are smarter than they look.
... and we're down to 49c.
I wonder if the 'ten days of exclusive talks' will finish this Friday, or whether they're ten 'business' days (which would be Thursday next week).
If necessary to get a deal over the line, BBG will make them ten 'Sundays', or ten 'Full Moon' days, or...
has anyone here bought or sold billabong shares in the last few months with all of this news going on? curious to know if there are any real traders putting their money where their mouth is on billabong
....and finishing back at 50c. sandspit it looks like there are a lot of shares moving. Whaaaat might tell us who he thinks is buying. My guess is day traders and other short term speculators punting on the deal going ahead at 60c......and as for the chances of that happening, toss a coin, it is as good a guide as you the likely to get!
@sandspit - I've put my money where my mouth is and stayed well clear of BBG.
@BB - trading volumes have dropped right off and were miniscule in the past three or four days. The whole market is very leery about BBG.
http://www.asx.com.au/asx/research/companyInfo.do?by=asxCode&asxCode=BBG
Thanks for that whaaaat. The volumes are still greater than I would have expected. Unless I am misreading the data they are turning over 1 or 2% most days. I suppose the easing price just attracts more punters.
Thanks for that whaaaat. The volumes are still greater than I would have expected. Unless I am misreading the data they are turning over 1 or 2% most days. I suppose the easing price just attracts more punters.
I reckon some are having a punt on it going through at 60c. Everyone has had a pretty good 8 months or so, if is doesn't go through they will probably just book their losses to offset some of tax bills that will be floating around come July.
Just a smattering of brilliant quotes:
Already bottomed out at 51c!
At 50c a share I'm buying $500 worth tomorrow.
Hmmm, I see it from the diametrically opposed angle.
My understanding is that if you buy tomorrow you are locked in to sell at 60c if the deal goes through. It could be a a quick 20% return!
Still a lot of punters at 53c
Any advance on 50c? If you think the deal is going ahead now is the moment! A swift twenty per cent is pretty good! Me? I keep my money in my pocket.
... and we're down to 49c.
....and finishing back at 50c. sandspit it looks like there are a lot of shares moving. Whaaaat might tell us who he thinks is buying. My guess is day traders and other short term speculators punting on the deal going ahead at 60c
@BB - trading volumes have dropped right off and were miniscule in the past three or four days. The whole market is very leery about BBG.
Thanks for that whaaaat. The volumes are still greater than I would have expected. Unless I am misreading the data
I reckon some are having a punt on it going through at 60c.'
(Gee, duh, what's shorting? We were blathering away not long ago at 83c, and gee whizz, here we are with a profit at 50c').
@sandspit - I've put my money where my mouth is and stayed well clear of BBG
That's enough wisdom for one day. Now it is crystal clear and beyond any doubt why over 95% of people lose in the share market. Please tell me that these people aren't loose in the streets, driving cars, making decisions, operating things... or even worse heading out into the ocean!
Gee, thanks for that, Professor Zumba.
What's up - the leotard too tight around the nether region?
What a load of bollocks. Are markets in shares of a publicly traded companies a zero sum game where money just disappears?
Hell No.
People of every income category lose money daily.
Uplifter, if your numbers of losers vs winners were anything close to correct, (95% vs 5%), which is seriously doubtful, whatevers, bru.... the funds didn't disappear. They would still there. Just a bit more concentrated in the winners hands. They folks who were more better at Due Diligence. And financial analysis.
Historically, markets have always existed in order to facilitate the interaction between providers of capital, such as savers and investors, and users of capital such as companies and government.
Both individual and institutional investors with excess cash continually want or look for avenues to invest in order to hopefully make excess returns over simple fixed income investments,.. even though it seems to some that markets exist to remove funds from stupid people.
Surf on.
uplift you grow more and more like a downdraft with every post.
Sounds like someone (tightsuptotight) had a little dabble got burnt and is now out to pronounce the whole game rigged?
Blind leading the blind reecen, shorting is for making money. Persistant down trends are a dream come true
Blind leading the blind reecen, shorting is for making money. Persistant down trends are a dream come true
All this speculating on where the price of the shares go is moot... When more people should be busting the bollocks of those responsible for flubbing their jobs as heads of this corporation, now reduced to a ripped nipple.
Great interview above Stu - will we see a fragmentation back to the 'local beach' again?
Also, good on you uplift for listing all the quotes relating to the share price above. Many minds make a market - in anything, even opinion and fashion.
Gidday Roller. Exactly. And 95% of people lose, or give their money away. As you say it is never actually lost, it goes into the hands of the winners. The stock market is a showcase of ludicrous human behaviour.
Below is a classic snapshot
http://money.usnews.com/money/blogs/planning-to-retire/2008/10/08/retire...
The headline should read, trillions made in stockmarket!
It is a massive subject. 'Experts', 'experts', despite all the analysis and 'wisdom' and 'intelligence', hurled the blind consumers money away, yet the lemmings march onward and downward. Ring the broker/fund/financial manager/course provider, he/she'll know. No they won't, or they would be trading, and enjoying the life. They can't, so they do other things. I lived extremely well off trading, and I stopped because of personal reasons, but I lived extremely well off trading. I'm easy to find, easy to check out. So I know when some one is bullshitting about their supposed trading...shares. And all the quotes in my earlier post are classic, how to throw money in someone else's bank account stuff.
The easist winner in the market is the market provider. Just like selling lottery tickets. Providing a service for profit.
Billabong chose to put the company at the mercy of the market, where 95% of people, relentlessly lose. Where literally anything, where the most ridiculous things can happen.
Sorry to correct you on a basic point of economics uplift particularly since it is so commonly misunderstood, but all that money you say was lost? Well it never actually existed, it was a purely notional number based on the impossibility of everyone selling at the same time and receiving the same prices as the market peaked at.
Further, trading in the form you describe is, of course, parasitism. It takes money out of the market and reduces the capital available for investment while contributing nothing, and that is real money, not some notional figure made up by an economically illiterate journalist to create a headline. Day traders are the lice on the body corporate. Presumably it wasn't ethical concerns that caused you to change careers.
Besides which, Uplift, you silly bunt, your point that trading in stocks leads to financial downfall for 95% of those that do so is irrelevant to the discussion that’s been thrashed around on this website for the past 18 or so months, which has centred on the horrible mistakes made by Billabong International Limited since 2007 or so. The share price is just a corollary of those mistakes. No one has given any advice to either buy or sell. Nonetheless, you have tried repeatedly to have your point acknowledged as sagaciously omniscient whilst belittling other contributors as ill-informed or worse, without any basis that view. You don’t know any of us, or our life experiences. And I dare say that many of us run vastly bigger concerns than a gym in a fishing village on SA’s West Coast. I know this will leave you unmoved. Fine. Continue leading zumba classes for bored fishermens’ wives whilst the rest of us enjoy chewing the fat. But just know this: you, dickhead, are an ignoramus.
Billabong would be great also!
Blinding brilliance! Thank goodness. No one lost any of their super, no share prices dropped, and no one profited! Genius, brilliant!
'Hey yous, I'm just cashing in me faaarkkinn super, but, I'll have the faaarkinnn old price thanks, an on me faaarkkkin billy stocks too, ya see its just on faaarkkkinnn paper, just a faaarkin notion, and I haven't actually lost a faaaarkkkkin cent!!! FFFFAAAARRRRKKKK orrrrfff yaarrr fffaaaarkiiin crooks, or I'll faaarkin sick faaarkinnn rabs onta ya!!! Orrrr, now I ffaaarkkkinnn get it, meee fffaaarrkkin money never existed any faarrkiiin way, so I never even ad any faaarkkinn super... faaarkkkinnn brilliant mmmaaaayteeee!!! I'll just ring me farkiiin lawyer and let i'm in ay mayte, he's a faaarkiin blinder on the faaarkin stocks too maaayyeeee.
'It's prolly best that I take it from here thank you blinder.'
'UUUHHHMMM, UUUHHHMMM', rising up and bristling like a startled, belittled, foaming chihuahua.
'No your honour, neither my blind colleague or I have ever discussed shares, stock trading, prices or recommendations at all, in fact...'
'Whaaat!!! Stop there, I've heard enough, your diametrically opposed, ludicrous blitherings about shares, prices,volumes are clear for all to see. Now, simply answer the question, have you ever earned your income trading in the markets?'
'Your honour you see, we, well you see, its a tricky one, he, I'm, we, well, I'm really successfull, and well it's just that well, whaaat we do is kind of, things are much different than they appear, an' prolly its just that, well my colleague, well...'
'Thats enough dribble, stop right there, enough! I sentence you and the blind side kick to a life time of chewing fat, deep fried in bullshit. Get out! Next!'
Again 95% of people lose in the share market because of the ludicrous attitude so perfectly displayed. The, I am a highly successful X, so I know heaps about share trading. And the market answers, totally irrelevant, big deal, thanks for the cash... neeeext!
That's it? A whole day to think of a riposte and that's all you've got?
Nice work.
You really should stay off the 'roids.
Seriously, I've never touched them, even though people constantly assume that I do... I guess you can't blame them though. Diametrically speaking that is. I know its getting a bit late, and he's prolly already in his jaamees frothing and shattered, but is B2 ok?
lift,
if 95% of people lose their crumbs in the share market, the game would run out of punters within a month.
i think your theory is faulty.
uplift has a problem distinguishing between short term trading and actual investment. It is not impossible for long term investors to lose money but it would usually be from 'an all your eggs in one basket' approach. As for the punters, the short term traders, well I hope his stat is right since it is more or less what they deserve. Of course successful punters always think it is their system or their particular genius that has produced their profit, sadly for their delusions it is almost always dumb luck. If you have enough monkeys throwing darts, sooner or later one of them will get a run of bull eyes. Not that I'm comparing uplift to a monkey, by his own admission he sounds much more like a gorilla.
From: Billabong The Hunter Getting Hunted, by Stu Nettle in Surf Politik/comments.
{From now on to be refered to as 'Exhibit A'.)
'Gidday the market has been very pessimistic for 5 years. Everything else, including why, is meaningless regarding Billabong, if trading its shares is the focus. The market dictates the price. If you think the market can't go lower, think Babcock and Brown in the first GFC. There's plenty of downside profit in Billabong yet.
Over 95% of people lose in the market. The reason is because of the same type of thinking that would believe that top surfers can excell at anything, simply because they are top surfers. The 'I am a successful X, share trading will be a cinch' disaster. Cannon fodder. Anyone of the tiny percent who have traded successfully, for a living, (and that means relying on trading alone to provide your salary) will use methods nothing like what the general consensus of trading is. Money management, based on 50/50 probability is paramount. Never go against the trend. All this other stuff is irrelevant. Not one so called 'expert' was calling sell when the GFC hit. Its hilarious. People still listen to them, oblivious and blind to their ineptness at trading. They would all be broke.
And don't confuse trading with investing...or gambling.'
Note that last line.
'Obviously Blindone, where is your solicitor?'
'I'm representing me fffaaarkin self yer ona!'
'Sigh. Do you, Obviously Blindone swear to tell the truth?'
Sound of chirping crickets.
'Do you...'
'Ooorriitte, oooriite faaarkk yas!'
'I draw your attention to Exhibit 'A', noting the last line. Would you read it to the court?'
'Yaar ffffaaaarkkinnn ***###, ###******## ffaaarkinnn c**#s, faarkkkinnnn,faarkiinn rabs 'll kick ya fffaaaaarrkkinn aaarsses ya ffaaaarkkkinn...'
'Quickly some one get a strand of fairy floss, and restrain the witness!'
'Obviously blindone, have you ever traded for a living, and actually made a living from it?'
'Well faaarkk, I'm faaarkking pretty faarkinng cleva, an ya see, it, eh, I faaarkinn, yeh eh, she's not so simple that one eh, Whaaaty an me, I mean fffaaarkkk rabs reckons, well jeez, oi, what was tha ffaaarrkin question ya honna? FFaarrkk!'
'Ive heard enough foaming blithering, and will pass sentence. Bailif, where is the Obviously Blindone, where has he gone?'
'We can't see him Your Honour, he's way down the bottom of that ridiculously deep hole that he's dug! Shall we try and get him out?'
'No, it's simple economics, the cost far outweighs the reward, just fill it in, thats more profitable and beneficial for all concerned.'
James Joyce would have be proud of that uplift. Pure stream of consciousness.
Bullshit! He was conscious when he wrote that dribble?
Well, we've already passed ten 'days', so we're looking at either ten 'Business days', 'Sundays' or 'Full Moon days'. I'll tick off each one as they whizz on past.
For sale or lease: Large corporate office space and warehouse facilities in Burleigh Heads. Motivated Vendor says submit all offers. Reason for sale: Moving overseas.
Email expressions of interest to [email protected]
Hmmm. Close of business today and still no word. Even the big financial news outlets were expecting something today. Shares went as low as 48c but finished at 49c (1c below opening). I wonder what tomorrow will bring?
If I was a gambling man I would buy some shares at that price. My guess is that it will go ahead.
Fine, then, BB. Poke the bear. But I shotgun you to decipher the fool's magnum opus that will surely be posted later tonight, just after the buzzballs have kicked in.
Rightio then. Billabong "will reportedly extend a 10-day exclusivity period granted to suitor Sycamore Partners as the two sides continue to discuss a takeover, according to The Australian Financial Review".
http://www.businessspectator.com.au/news/2013/4/23/retail/billabong-exte...
"Sycamore has reportedly struggled to obtain all of the key documents it has requested as part of its efforts to review a potential Billabong buy"
You'd think they would of had everything ready to go and handed it over in an instant seeing as this saga has been ongoing for so long.
The longer this goes on, the less likely it seems that it's going to happen..
OK, apparently we're gonna have some news by the end of the day.
"The company and a person involved confirmed the parties still have until close of business on Tuesday, April 23 to come to reach an agreement within the bounds of this agreement".
So, either Bong will have been bought by Naude/Sycamore, or the exclusivity will have expired and it'll probably be back to business as usual.
http://www.brw.com.au/p/business/hours_left_for_billabong_to_ink_Sy2TLVP...
A bit more
http://www.smh.com.au/business/billabong-denies-takeover-talks-stalled-2...
"Billabong has extended exclusive talks on a potential takeover bid for another 10 days. The new period of exclusivity will end on May 8."
Fo' reals?
http://www.businessday.com.au/business/billabong-takeover-talks-extended...
This is the critical extract: "... the quality of earnings report".
As we, the core market have known for a few years now, the price to value ratio of each BBG brands' offering (but especially Bong-branded clobber) is woeful. Far too much to pay for too little. Gross margin in sales have been in decline since Fall 2010. No blindingly good new products have been added into the ranges for years now.
It's one thing to buy a company for a bit more or less than the current price of its inventory. But what if that inventory is overvalued? And by how much?
That this fact is still unknown after almost 16 weeks of intense due diligence is testament to just how dysfunctionally lousy BBG's point of sale information system(s!!) are.
.. and we're down to 45c.
48 hours 'till D-Day. And there's some pessimism in the financial media: "Sources close to the investigation tell The Australian Financial Review there is still no certainty the cut-price offer will get off the ground."
http://www.businessspectator.com.au/article/2013/5/6/retail/breakfast-de...
Although JP Morgan has been quietly building its shareholding over the past little while...
http://www.billabongbiz.com/phoenix.zhtml?c=154279&p=irol-irhome
I'm lost. No idea what's gonna happen.
There's a game going on whaaaat along the lines of screw the small investor. I couldn't guess the details but I will predict that the deal goes through and that within 12 months it is looking like poor value for those forced to sell at 60c.
You may well be right, BB.
But it's deeply telling, in my view at least, that BBG's board has allowed the exclusive period to drag on as long as it has. That tells me that a majority of the board members have not liked the results of Launa Inman's strategy thus far, have no or little faith in her pulling it off, and see this takeover as the best of worst worlds, if not the only possible way out.
Two profit downgrades in 8 months. That's failure in anyone's language.
"Billabong International Ltd shares have been placed in a trading halt ahead of a release to the market."
http://www.businessspectator.com.au/news/2013/5/7/manufacturing/billabon...
The Teachers Union Fund has no faith either - it's just bailed out: got in for between .98c and $1.12; got out at around 46c.
http://www.billabongbiz.com/phoenix.zhtml?c=154279&p=irol-irhome
And still no news.
I still think it is all about the deal. Naude leading the bid, conditional on Merchant holding his share. For me that doesn't sound like a fresh start.
Bit of a blow then for the market once it re-opens Whaaaat?
I can't see this deal going ahead with all these delays..
I reckon the delay is part of the strategy. Scare the punters and buy their shares at a 25% discount. Look at who is doing the buying, not who is doing the selling.
But how does the board's eager willingness to extend fit with your theory, BB?
Each extension to the exclusivity period has seen the share price drop further. Why would Merchant try to lose more of his share value?
Also, he's one out of eight or nine directors.
Merchant exchanges his shares for shares in the new entity so in my understanding the value of the Billabong shares doesn't matter. Beyond that who knows. You could be right in which case they are going belly up!
The deal is not yet done. And the banks are in control
http://www.businessspectator.com.au/article/2013/5/9/retail/breakfast-de...
"Billabong International Ltd has again requested its shares be suspended as it continues talks with long-time suitor, Paul Naude-led Sycamore Partners."
And on it goes.... This is dragging on way to long.
http://www.businessspectator.com.au/news/2013/5/9/retail/billabong-exten...
@whaaat.
The fact that this Teachers Insurance and Annuity Association manages well over 480 BILLION in assets, don't you think the selling of a few million shares of any particular penny stock in their port is pretty much meaningless?
Even if their BBG share sale came with a 50% buzz cut?
......and if someone sells someone else has to buy, so there are at least a few people who see an upside. I find it hard to imagine how anyone sees has an interest in the deal failing. The banks would take a big haircut and the shareholders would lose even more. I imagine all involved are playing hard ball at this stage which is why the deal is taking so long but I still think there will be a deal and that the shareholders who are forced to sell will be the big losers.
Rolls ole chap, I wasn't and am not making any judgment about TIAA's portfolio management style. Was just making the point that it too had apparently lost faith in BBG making it back from the brink.
Still no word
http://www.smh.com.au/business/stalled-takeover-talks-bad-news-for-billa...
Interesting quote in that article: "UBS has said the company may need to raise another $100 million from the market if the bid fails."
And if they can't raise $100 million?
......presumably that's what the bidders are holding over the board. Billabong would not be able to raise the money to service the debt and the banks would foreclose and sell off the assets. The shareholders would then get nothing unless the banks raised more than the debt.
I think the other side of the equation is that the bidders want this deal to go through. One because they think it is radically under valued and two because they have put a lot of time effort and money into the bid. So neither side has anything to gain from walking away but a lot to gain from pressing the other side as hard as they can. Hence the delay. Well that's what I think. whaaaat takes a different view.
Sycamore are going to walk IMHO. It's taken too long to work the deal out.
The only chance is maybe a revamped deal but I can't see a full take-over after all this time otherwise they would have called it before this.
Starting to look that way, Seal.
http://www.businessspectator.com.au/news/2013/5/10/manufacturing/former-...
Hang on, aren't they in a period of (extended) exclusivity with Naude/ Sycamore though?
"The Australian reports Billabong has resumed discussions with members of the Altamont Capital Partners and VF Corporation consortium that had previously conducted due diligence on the company with a view to a takeover."
Ahh, I see what's happened. The exclusivity finished yesterday, Bong immediately put shares back into voluntary suspension, and picked up the phone to VF/Altamont (if the media report is true).
Still nuthin'?
Expect an announcement this week - a decision has been made and its likely to surprise most. I doubt we will see Laurna as the boss for much longer
How do you know, Saltman? Source...?
Interesting stuff saltman.
Saltman you need to put up. Whats the call heads or tails or goodbye??? Rumours flying about stop-credits, outstanding super to employees. Whats your call Saltman?
cmon salty spill us a bit more , give us some...can you see greasys mt woodgee palace from your room
"JPMorgan Takes Stake In Billabong While PE Offer Hangs".
http://www.law360.com/articles/438557/jpmorgan-takes-stake-in-billabong-...
Is this an unusually long period of share suspension? It's one thing for due diligence to go on for much longer than initially expected, but to halt trading on the stock exchange for eight or more consecutive days... well, that seems like a very long time. Anyone?
Dunno the answer to your question, Ben, and I think it is more the domain of some of the traders on here, but when JP Morgan takes a stake, it's my impression that they have handed over some of the company because they could not meet their debt obligations. Am I way off on this one?
Gidday thermalben, its not very long. Suspension of trading a companies shares can go on for months.
Ben, this is the ASX rule in question:
http://www.asxgroup.com.au/media/PDFs/Chapter17.pdf
Kaiser, it appears from docs filed with the ASX that JP Morgan has been building a stake as agent for other parties, including Citibank. Doesn't appear to be a debt for equity deal.
Here's a classic example I remember, when trading OZ Minerals Options.
http://cooberpedyregionaltimes.wordpress.com/2008/12/30/oz-minerals-debt...
http://www.ozminerals.com/Media/docs/ASX_20081230_RefinancingDatesExtend...
Remember that one whaaatsy...whaaatso...whaaatster...wwwwh...hello...are ya there cob...maaaayyyteeee...cccoooooooeeeeeee...whiiitless...knock knock...shit, the lights are on but prolly no one...maybe whaaaatlers taken a vow of silence?
You shouldn't laugh at your own jokes, but, sorry, excuse me while I roll around on the floor.
How old are you mate?
Ouch, heavy, serious, deep, responsible stuff man, yipes! Zen again...
And I stand by it.
Very brave and commendable, going down with the ship, but it looks like you are crouching to me, and hats off to you, I've never seen anyone be able to grovel/snivvle so low as to make a one foot wave head high! Face up to that fucker!
Go to Thailand - they copy any and everything the best.
Who needs surf companies? what have they done for surfers/me lately.
I want my own surfbreak constructed where I can fence out ALL the rest of you surfers.
don't support Bali - trash everywhere!
Indonesia stinks
Zen, Ben and other good men.
Generally speaking, I'm not a fan of quoting anything from the Good Book. But I have to say that the quote from Matthew 7:6 seems quite apposite right now.
"Do not give what is holy to dogs, and do not throw your pearls before swine, or they will trample them under their feet, and turn and tear you to pieces."
In the good old days, when I first joined this fray, the Idiot Bunny was an outrageous conspiracist and an over the top defamator, but at least he was funny some of the time. I almost miss him.
Lately, it's just been swinish. Although even pigs have more intelligence than some who've come in late.
So I'm off. It's been fun but life's too short and time's too precious to do battle with fools from the shallow end of the gene pool.
Adieu. May Huey smile on you all.
And to you good Sir.
It's been a pleasure.
Osewani ni narimashite.
Thanks for your contributions whaaaat, you'll be missed.
I generally skip certain peoples contributions to avoid getting pissed off, particularly when they dribble shit.
It's a shame some get under your skin whaaaat, I enjoy your posts.
I hope that you return sometime.
I think I'm similar to you Fitz, I'll skip certain people's contributions and avidly read others. Whenever the 'triple-A what' appeared on the homepage I'd always click, so it's a shame it came to this.
Thanks for your contributions and all the best.
PS: Feel like I'm signing a farewell card for a person leaving work.
Hey whaaaat sorry to see you go, I was looking forward to your take on whatever resolution Billabong arrives at. All the best.
Has anyone considered that since the Billabong deal is denominated in Australian dollars it is getting cheaper for those with US dollars every day?
Sorry to see you go Whaaat. I don't tend to comment much these days but still always read yours.
Still nuthin'!
In the meantime, The Australian is reporting: "Billabong International is struggling to retain key staff as takeover talks drag on, with senior designer Mandy Fry and Sector 9 founder Steve Lake the latest to exit the besieged group".
http://www.theaustralian.com.au/business/companies/key-billabong-staff-h...
'in the good old days, when I first joined this fray, the Idiot Bunny was an outrageous conspiracist and an over the top defamator, but at least he was funny some of the time. I almost miss him.'
So I'm off. It's been fun but life's too short and time's too precious to do battle with fools from the shallow end of the gene pool.
Battle, fray? Exactly. That fuckwhaaat, was your whole reason for posting, or engaging with me. It shone through right from the start. You are so blinded by that goal, that you made stupid bungle after bungle, in your desperate quest. They are all in your posts.
Its not why I post. But if someone uses something blatantly ridiculous, such as using the example of Bruce Lee for an argument against strength and weight training to improve performance, and I point out that with minimal effort its actually easy to show the exact opposite is true, too fucking bad if they spit it.
http://www.rbgfitclub.com/bruce-lee-weight-lifting-philosophy-and-routine/
'Furthermore Bruce was very innovative. Back in the 50's, the Chinese Martial Artists were very conservative. They believed that weight training would slow down the practitioner's speed. But Bruce found a way to beat it. He would start his program with heavy weights and low repetitions first, then he reduced the weights and increased the repetitions. He continued to do that until his repetitions reached maximum and the speed of the exercise also increased. In this way he built muscles and developed power without losing speed.'
http://www.google.com.au/imgres?imgurl=http://www.joecarrero.com/images/...
I actually post when I am interested in the truth of something, including why a modern day, top Pro Surfer can't even get a sponsor. If you enrage yourself over that, that's all it is, you choosing to do that.
Where I come from fuckwhaaat, if you strut around wanting to have battles and frays, then obviously its because you want it to be on. Simple. And when it suddenly is, you don't start squealing, drop your fuckin lip, wave your fuckin blouse, spit your fuckin dummy and crawl off on your fuckin knees.
Blah blah blah, sounding exactly like Schmucker when he realised how much of an idiot he is. Start dropping a few f-bombs too make you sound tough and make your self feel better. Go away Uplift, you moron.
Who ever thought that the good folks on Swellnet's surf message boards would be offended over a bit of Sledging?
Uplift, we created the forums for ranting. Can we keep article comments on topic please? Thanks.
An interesting comment from Brand Finance's Xander Bird: “The historic strength of the Billabong brand has bought the company time to turn itself around. However that time is fast running out. Unless perceptions can be changed, Billabong will remain a brand of the past, rather than being associated with the future.â€
http://www.bandt.com.au/news/marketing/woolworths-australia-s-most-valua...
thermalben, no worries I couldn't find the forum for this rant.
'Zen, Ben and other good men.
Generally speaking, I'm not a fan of quoting anything from the Good Book. But I have to say that the quote from Matthew 7:6 seems quite apposite right now.
"Do not give what is holy to dogs, and do not throw your pearls before swine, or they will trample them under their feet, and turn and tear you to pieces."
In the good old days, when I first joined this fray, the Idiot Bunny was an outrageous conspiracist and an over the top defamator, but at least he was funny some of the time. I almost miss him.
Lately, it's just been swinish. Although even pigs have more intelligence than some who've come in late.
So I'm off. It's been fun but life's too short and time's too precious to do battle with fools from the shallow end of the gene pool.
Adieu. May Huey smile on you all.'
thermalben, or for this rant either?
'Blah blah blah, sounding exactly like Schmucker when he realised how much of an idiot he is. Start dropping a few f-bombs too make you sound tough and make your self feel better. Go away Uplift, you moron.'
uplift, you're more than welcome to continue over here: http://www.swellnet.com.au/forums/1/topics/new
But please keep this thread Billabong related. Thanks.
Re: Upskirt. Sounds more like Big Wanker but not at all funny.
Very intelligent but not so smart.
I imagine him to be one of those super fit, very awkward and unnatural surfers.
Well it's come to the end of another week and still no word on the Billabong deal.
Looks more and more likely that Sycamore will pull the pin to me.
I wouldn't be surprised if we see them owned by the ANZ bank or whoever else they owe the big bucks to in the not too distant future and that will not be good for all involved.
Not a good look if you think about the timeline of events - company seemingly doing well and pursued by suitors, but coyly plays with them and publicly announces it. Then follows a bunch of negative stuff like profit downgrades, substantial book losses, store closures, lawsuits for directors, stock dilution etc etc. Then gradually the mood changes and they are the ones pursuing buyers. Then nobody wants them. They're obviously in trouble and it is probably already too late. Where to from here?
Still nuthin'. This is ridiculous.
Ridiculous??? THIS IS THE STOCK MARKET !!!!!!!!!!!!!!!!!!!!!!!!!!!!!
So at what point does it become ridiculous then, uplift? Another month? Another six months?
The whole Billabong-buyout saga has been going on for fifteen months now. I'm sure staff and investors would like some finality so they can get on with things.
Just like this thermalben,
there is no bottom, no limit, no end to what is ridiculous in the sharemarket.
http://www.theadvocate.com.au/story/81386/trading-halt-close-to-abuse-of...
What rules? The 'scientific experts',
http://ses.library.usyd.edu.au/bitstream/2123/2213/1/Steven.pdf
explain it this way.
'Towards this end, trading halts provide appropriate
time for investors to disseminate new
information that could materially affect the value
of a single security, a group of securities, or
the market as a whole.'
See, nothing to worry about. Its for their own good.
I say this with total sincerity, nothing can match the stockmarket as a showcase of ludicrous human behaviour. Even South Park.
There is only one thing that can be taken as truth and fact in the stockmarket, the price, the only thing that doesn't lie. Why anyone listens to announcements and reads company reports is beyond me. What a waste of trees. Trees pulped into dribble. Just like this whole Billabong fiasco.
When I traded it was hilarious. I did make my living from trading, my sole income was from trading. I witnessed endless, unbelievable shit. I remember a classic Billabong set up, where Bluescope was the subject of a mindless frenzy. Every broker everywhere screaming buy. 'Experts' coming up with all sorts of crap. Lemmings pouring in from all directions. 'Take my money...please...no take mine...no over here sir, please take mine, I was first... no, over here, he's lying I was!!!
I used a mix of platforms and phone broking. One morning I rang my broker, from one of the biggest, most respected houses, and all I could hear was insane, frenzied screeching and screaming. He was frothing, being screamed at, and screeching himself. Overnight an announcement came out, and Bluescope opened miles under the closing price, a huge, ridiculous (there's the magic word again), 'could never happen in a million years,' gap. Stop losses were useless (who uses guaranteed stops, they cost too much). Mass obliteration galore! Big deal, just a speed bump. Whadya reckon I should buy now...sir?
Nothing beats my mates GGP debacle though. It was a showcase of every form of ridiculous ludicrosity (the word formed from that event) all rolled into one. Inside contacts, guys at the coalface, can't go wrong, announcements, expert analysis, it had everything. Intelligent, successful people became reduced to blithering cretins. For months on end. What a sledge fest! It gave me an unassailable, untouchable lead in the world sledging titles that makes Slater's record look like a speck of dust.
Interesting comment tucked into the end of this article in The Australian:
"...it is understood the company is going ahead with its transformation plans, potentially signalling its expectation that an acceptable takeover deal will not be reached."
So, does that mean they'll shortly be looking for another round of capital raising?
http://www.theaustralian.com.au/business/companies/quiksilvers-us-revamp...
The way things seem to playing out, the next thing they'll probably be looking for is an Administrator.
And nothing from the CEO or CFO, Laura's not exactly showing leadership or inspiring investor confidence since taking on the role.
Three weeks ago I sent a proposal to BBG from a Gold Coast Consortium inteterested in buying the Australian and NewZealand Retail stores in a deal worth $74.4 million. Launa and the Board have not yet reached a decision onnthis proposal and have not,disclosed it publicly. Basically, it is a paper offer of TEN CENTS a share in the form of one new $1 Redeemable Preference Share In a new non listed Australian company. A dividend of 10% will be paid forvthree years after which time those shares will be redeemed in CASH at $1-25 . It involves issuing approx 48 million new shares at 1 for 10 and with dividends and the premium on exit will cost $74.4 million.
I am having trouble convincing the Board of the benefits to Shareholders, staff and Australia and welcome any comments or feedback. It opens the door for BB to sell off all the international retail business to the likes of Sycamore, VF or Altimont considering that Sycamore have now indicated and demonstrated their original intentions from day one to acquire BB for virtually nothing as is their usual modus operandi. They have now withdrawn their cash offer of 45 cents per share and are pushing for a recapitalisation plan instead. It is a smart and cheap move whereby they put in just $300 million and pay out the bank debts. In return they want new shares in BBG which will be issued at probably 20 cents per share because that represents the current NTA of BB and the dilutive effect on all other shareholders will give them an absolute conrrolling interest of just under 77% which can NEVER be outvoted so presumably they will control the Board and will not declare dividends driving the SP down even lower. They will use the 3% creep rulesto increase their stake to 90% then compulsorily acquire your shares at whatever price they want.
Like Barbarians at the gate this is how they acquire their targets. I am surprised their is any creedence in Nauseafeter all he has been in charge of the Americas since 1998 yet its performance has been abyssmal now he is suddenly going to turn it all around....How come he didnt show this expertise before now.
Billabong has clearly made some errors of judgement. I am not a surfer but a bean counter. My job is to see if I can come up with a sensible workable solution for the benefit of BB shareholders, staff and Australians. I think I have done that. Billabong needs to clear its bank debts and Sycamore has witthdrawn its offer of 45 cents a share to simply a cash injection to pay off debts in return for ultimate control which is predatory and not in the best interest of shareholders, staff or Australia. My suggestion would be for Sycamore, VF Altamont or whoever wants it to acquire the international retail operations of BB including the bank debts which relate.mostly to the US anyway and based upon my offer they should be offering around 60 cents per share plus the $312 million of bank debts.
That would see shareholders get the equivalent of a little over 75 cents per share PLUS they would still retain their shareholdings in BBG which would be debt free and a wholesaler/manufacturer with a stable of valuable brands that it was licencing worlwide and making profits and paying dividends.
The biggest mistake BB made was trying to be a wholesaler and retailer as well as online marketer all at the same time. You very quickly alienate hard working, battlers who have been selling your product for years when you open up shop next door, across the street or in the same shopping centre.
BB may yet have to go back to its grass roots and listen to its customers and find out exactly what they want and make sure that they deliver at a reasonable price..
I think my proposal is a good one ,and in everyones best interests so I welcome any comment or feedback to make it work or improve on it. Thanks
Three weeks ago they were in exclusive talks with Naude, and I imagine very busy, not to say stressed, trying to make the deal work. It's a bit late to be sending an offer their way don't you think?
Maybe the white flag is waving...
http://www.theaustralian.com.au/business/companies/quiksilvers-us-revamp...
"it is understood the company is going ahead with its transformation plans, potentially signalling its expectation that an acceptable takeover deal will not be reached."
I'd be happy to see them go back to basics on their own, rather than having some interloper try to sell me products from a re-packaged brand.
Kaiser, Ben posted the same link early this morning.
It's a bit light on details, but I agree I'd like to see a return to basics with a leaner, meaner Billabong without some Johnny come lately trying to pick the bones off a once bloated, rotting carcass.
whoops, scanned the posts a bit quickly while 'working'. Sorry for duplicating...
If they are gonna make this work from an already weak position, then there is going to have to be some savage cutting going on, which hints why some pretty senior (particularly HR) staff have exited. They would not want to be around and have to hand out all the redundancies etc. Either that or they've been held accountable for staff levels.
Still, plenty of fat companies have had to take their medicine in the past few years, retail has not escaped that and neither should they.
I can't find the original source, however stock market website The Fool says "The Australian Financial Review is reporting that Sycamore Partners has abandoned a full takeover offer, and is instead looking at a recapitalisation deal."
They also quote the surf industry website shop-eat-surf, who say "Sycamore had dropped its bid" (to 45c). And with regards to the other potential suitors: "VF Corp is no longer involved" however "Altamont is still interest in buying pieces of the company".
http://www.fool.com.au/2013/05/10/billabong-bid-dropped-to-45-cents/
heaps of gravedancers around this massive ball of fukall... as Stu points out,
picking up the pieces.
as goes Billabong, so goes Australian surfing?
I' ll happily dance on the grave of a system that pays 17 year olds $250,000 a year just to surf. It is a measure, along with many others, of the dysfunctionality of our economic system that a 17 year old earns that for SFA when a child or aged care worker picks up $40,000 for working their arse off 40 hours a week. Australian surfing has more to with the hundreds of thousands of us who work full time and get out there whenever we can in whatever conditions happen to be available than with an elite.
Shop Eat Surf are reporting that Billabong have put up their Canadian Surf Chain 'West 49' for sale.
"..on the market include West 49’s 70 stores, 18 Amnesia stores, six Billabong stores and two Element stores".
In June 2010 Billabong purchased West 49's 138 Canadian action sports retail stores for CAN$83 million. At the time, the deal was worth AUD$92 million but the climbing Aussie dollar over the last few years has put it almost equal with the Canadian dollar.
http://www.shop-eat-surf.com/2013/05/billabong-puts-west-49-up-for-sale/
http://www.theglobeandmail.com/globe-investor/west-49-skates-into-deal-w...
Hmm, I didn't realise this was happening:
"(Billabong) stock is still trading on the over-the-counter market in the US, where it has risen from 46 US cents to 65 US cents since being suspended from trade in Australia".
http://www.theaustralian.com.au/business/mergers-acquisitions/billabong-...
TransWorld Business published a strange 'rumour' this morning:
"...the company is moving ahead with selling off non-core operations as rumors fly about a Chapter 11 filing".
Firstly, Chapter 11 is a chapter of the United States Bankruptcy Code. However, Billabong is an Australian company.
Secondly, (and this is not my area of expertise), but I'm pretty sure bankruptcy in the USA means a whole different thing to bankruptcy in Australia.
http://business.transworld.net/130993/features/billabong-unloading-west-...
I would be surprised if they filed a Chapter 11 in the US. Paul Naude has been in charge of US operations since 1998 and if it has deteriorated to such an extent how in the hell does he now consider he has the expertise to turn the whole group around with his opportunistic "offer" which from all reports has now become an offer to pay out bank debt in return for what will more than likely be 77% control of BB for $300 million.
Launa Inman seems determined to go ahead with the turnaround program and is dismissing the on again off again
unreal deals that were nothing but BS to get a good squiz at the books, find whatever flaws they could then drop the offer even more.
It looks like West 49 is for sale after it performed dismally, pity it didnt do that before they blew $99 million on buying it then writing it down to buggar all. Now when they sell it technically if they make a profit it will be taxable however tax losses will offset that.
If it were me running the show I would sell ALL RETAIL outlets.
The golden rule of wholesale/manufacturing ...You cannot expect loyal business operators who have invested in your stock to be very happy when you buy out chains of retailers and open up next door, across the street or in the same shopping centre as them competing for sales against them. You add a further distribution channel with massive online sales and you lose credibility amongst those you need most.
I would like to see a meaner leaner BBG which is a wholesaler / manufacturer that owns and promotes a stable of top brands which it can market worldwide under licence with No debt and making profits on every sale and paying dividends. Perhaps that is the direction it is heading.
The whole operstion needs streamlining with better stock control and loss making profit centres need to be closed. Does that mean staff losses....more than likely ....yes....
Can BB afford to sponsor teams and events. Quiksilver have announced a significant cut back in selling costs which are bundled in with sponsorships as part of their strategic plan which parallels BB in so many ways.
I expect BB may withdraw from sponsorships...it has had its day but thereturns for dollar spend are not there and other sponsors will pick up the events...probably not surf or skate companies.
BB is fixable, it should never again become the monster it has now become. Lean and mean producing quality merchandise and an affordable price and that will probably mean getting out there and talking to people to find out exactly what it is people really, really want and not a lot of non core crap that is a dime a dozen in thousands of other shops anyway. BB needs to become a quality wanted product once again.
Business Spectator's Alexander Liddington-Cox says "It’s looking increasingly unlikely that Billabong International will get a full takeover".
"One of the standard conditions is that when a suitor puts down a bid, or even an indicative proposal, that the target cannot sell any businesses. Otherwise all bets are off."
http://www.businessspectator.com.au/article/2013/5/24/gaming-and-racing/...
I think they know that if they lift the suspension of trade with only news that another takeover is not gonna happen, there will be seismic shifts on share price. Maybe they've known for weeks that the offer is gone, and have been using the past couple of weeks to try to formulate something that looks like a plan so they can go to market with some form of direction. They won't start trading again until they can announce something with a bit of credibility. It's gonna be some serious restructuring if it's taking this long.
Are you allowed to do that though? Suspend the trading of shares while you 'sort things out'?
Well it may be a convenient time to take advantage of the situation. The only thing that would pull the rug out is if Naude's team announced they weren't going ahead but, as he is an ex-Director and now part of a PRIVATE consortium, it's no skin off his nose to allow things to stay as they are until BBG want to announce something.
Stockamrket laws are pretty shit and you can always wrap something up to be other than what it is, especially if it is tacked on to a 'real situation'. It certainly would be a manipulation of the law and the way it is intended.
'Are you allowed to do that though? Suspend the trading of shares while you 'sort things out'?'
No different to businesses adhering to taxation rules. No one twists things to avoid tax. Surely? OMG Really!!? Do they!!?
Or criminals with means hiring solicitors to uphold the law and protect their innocence.
'Are you allowed to do that though? Suspend the trading of shares while you 'sort things out'?'
No different to businesses adhering to taxation rules. No one twists things to avoid tax. Surely? OMG Really!!? Do they!!?
Or criminals with means hiring solicitors to uphold the law and protect their innocence.
I heard a whisper that come EFY it's all over. BB selling everything it can to stave off the banks has not been enough.
Still nuthin'.
And Evo, that's a BIG claim. Where are your whispers from? Industry based (surf or finance) or general carpark gossip?
A small update, but a confirmation nonetheless: "failed to secure a suitor after a near month-long trading halt, saying its drawn-out talks were continuing with Altamont Capital Partners and Paul Naude-led Sycamore Partners."
http://www.businessspectator.com.au/news/2013/6/4/retail/billabong-fails...
Wow. "Billabong eyes break-up as takeover talks collapse, earnings downgraded".
The Australian reports that Billabong are speaking with BOTH previous suitors (Altamont/VF and Sycamore/Naude) about "alternative refinancing and asset sale transactions".
http://www.theaustralian.com.au/business/mergers-acquisitions/billabong-...
BBG share price is now 20c.
Interesting quote from Billabong's press release to the ASX today, regarding SurfStitch's European expansion (BBG own 51% of SS):
"Our ecommerce startup losses in SurfStitch Europe have been $4 million larger than anticipated".
My understanding is that they only began their expansion towards the end of last year. How much were they expecting to lose in half a year? In an online portal no less?
http://asx.com.au/asxpdf/20130604/pdf/42g8x3q8t5wrvc.pdf
Sorry for the late reply Ben, I've been a bit slack checking the internet recently. I guess it has been answered already with the press releases.
Yeah very interesting developments Evo. Share price has rebounded back to 26c (!) but it's hard to imagine where they could go to from here.
SMH just released article. Hard to blame e startup losses.
http://www.smh.com.au/business/billabong-wiped-out-as-suitors-flee-20130...
Maybe evo on the money. I would be asking for my super if working at BBL
Here's some old quotes on the topic.
'@Victor, sell, still some good profit left in Billabong at 83c if you can short it. Buy? Why? What for? It would be like gambling on a 45 degree heat wave in Tasmania in winter. Over 95% of people lose money in the share market. Rule one, never to be broken, never, ever, ever trade against the trend. Over 95% of people say no worries we'll never, ever... hold it!!! Shit, its going that way, lets go the opposite, it surely has to change now, imagine how much we'll make, quick, we better get in now before we miss out!!! Ahhh shit!!! Oh well, its only money, we can afford to give it away.'
'The only truth that can be trusted, the only thing that can be relied on is the price. To truly know why, you would need to be a mind reader.
https://www.google.com/finance?q=ASX:BBG
Late 2007 was the big turning point, the signpost, the crystal clear reasons to short, to look at Billabong as a sell option only. Why? Who knows, its unknowable, and irrelevant in the scheme of things. Since then, the signs are clearer and clearer.
Unless you like expertly discussing nothing but conjecture.
And until something reliable, the price, says otherwise, the ripple can easily become a lake. All up to the fickle public and their perception, which will be the thing that sets the price.'
The signs were pretty obvious. Its a sad fact, a bit of a reflection on our society, but announcements and company reports aren't worth bothering with. They are always loaded, tampered with. Only price and price movements reflect the truth. Even volume can be misleading, if its not related to price.
It's ironic that parko, billabongs highest profile athlete, misses his heat because he skipped work to go fishing on the same say Billabong shares collapse in a steaming pile of cow manure.
This doesn't paint a pretty picture: "The banks will have no hesitation in ripping BBG limb from limb as the banks collect on its debt," said IG analyst Evan Lucas.
http://www.abc.net.au/news/2013-06-04/billabong-delivers-profit-warning-...
"Several senior Billabong employees in the Americas were laid off today, including well-known sales executive (and) retailer favorite Jeff Booth, Men’s National Sales Manager".
http://www.shop-eat-surf.com/2013/06/layoffs-at-billabong-naude-update/
If one was to re-title this article, what would be a more appropriate word in place of ripple?
Spittle. Shittled.
Or just plain FUBAR?
Analysts at Citigroup Inc reckon the RVCA, Billabong and DaKine Brands could fetch US$110 Million.
Well, that's just over 1/3 of the debt paid off.
http://blogs.wsj.com/moneybeat/2013/06/05/rvca-billabong-and-dakine-bran...
(note: Billabong bought DaKine in 2008 for US$100 million, and RVCA in 2010 for an undisclosed amount)
Yes but then they wouldn't own Billabong any more...
What would they call themselves?
SMH has some great analysis by Business reporter Blair Speedy.
"....to use a surfing analogy,this is less of a wipeout than a close out - that unsatisfying situation when the waves won't give you a clear run and instead dump you right where you started...."
that's some great journo work
Well the shit is hitting the fan at Billabong. From sources in the building they have retrenched at least a dozen people so far in the last few days. These people are not just shop workers either. People that have been working for years in senior design positions and all I can say is I feel sorry for them as they have been dragged into the mess by the bad decisions of the current/ previous management (board of directors and regional managers) Heads will role for sure in the next week and I will bet it will be the Australian manager next on the chopping board.
@kaiser, with not that much left after the latest news but a 50% share of Nixon, maybe One Ball would be appropriate?
http://jezebel.com/5093338/the-5-most-famous-one+ball-wonders
To the uncouth-barbarian, if what you have stated is true which I believe it is in relation to trying to buy the retail of Aus/NZ I think the management is kidding themselves not even looking at your proposal and giving it a serious consideration. The way it is going to pan out is that the suitors will sit back and wait till the banks come in a slaughter the business and then the it will go for cheap. I would do the same if I was in the private equity groups involved. They are in the driving seat. BB has no time on its side. They are in complete mayhem and cutting costs but it is to late for this. Retrenching staff at this late in the game is not going to turn it around quickly. The people that are being retrenched are people like Jeff Booth - USA national mens sales manager who has actually increased sales of late. Why get rid off someone who has great relationships with the shops and put in a person for 30k less and who possibly cost the loss of sales of more than 30k.
The uncouth- barbarian has inside knowledge of what going on as he knew of the private equity plays 10 days before it was released to the market on monday/ tuesday this week. All will be played out in the next 3 weeks. If it is still afloat will be a miracle.
Will these developments have any bearing on this year's Billabong Pro Tahiti? I realise there are way more important matters at hand (ie local job security etc) however I couldn't help but wonder whether they have the ability to cut the event at such short notice.
@thermlben I have knowledge of some of the Senior management and they have already been exploring this option. They would still loose a few million as all the containers and workers are starting to set up over there. If it goes under which if I was Tom Waterhouse I would say are pretty goods odds at the moment it wont matter what happens as the ball is not in their court and has not been for a while. They are trying to turn it around but it is hard with such a huge business and so many facets that are complex. I can guarantee one thing is that Launa Inaman (CEO) will get a million dollar pay out either way it goes. She will be sacked on the spot if it goes under and if the private equity group Sycamore takes the debt off their hands for 77% or near of BB, Naude will take great delight in showing her the door. No love lost in the senior ranks for the CEO. I was in the building a few days ago and know a few of the heads of the brands and they ALL hate her and say that she has even personal grudges at some people for no real reason. She is hoping to make mass sackings and put all her alias in these positions. She already has spent millions on consultants that she also worked with in Target and no surprise if they also got the sacked jobs very soon.
Its bad news hearing about the layoffs up there. Baffles me why they dont cut some of the sponsored surfers first rather than key management? Usually when companies are in trouble they'll cut the advertising budget first and that's the department sponsored surfers work in - advertising.
@the-roller, if they're left with half of Nixon, then that leaves them with Nix. Pun intended.
Sorry, not a laughing matter really. They should abandon all brands and go back to the core that built the business - keep the Billabong brand and jettison the rest. Private Equity firms should only be interested in this brand, I don't see the rest as having intrinsic value anywhere near their supposed 'value'
@top-to -bottom-bells. The surfers cant be sacked immediately as all are on contracts. I bet though if you were a surfer about to renegotiate you contract it would be ripped up and you would be without a sponsor. If any one wants Gordon Merchants personal email to give him his just deserves please tell me on this forum as I have been itching to email him but I know him and would love to tell him what a F... idiot he has been with his decisions.
Have you read this article, QLD? It's scathing in its assessment of Gordon and it wasn't written by just any journo. It's penned by the editor of BRW.
http://www.brw.com.au/p/business/billabong_investors_shouldn_forget_WPhE...
Hi Stu, yeah I read this this morning on google news. Well written. He was known as Greedy for good reason. I don't begrudge him for diversifying his assets as that is smart. What makes me angry/ disappointed is that its going to go bankrupt and split up. I can tell you the vibe at Billabong is toxic. The workers are waiting to get the call from HR and be shown the door. It should not have gotten to this. The board/ previous board and CEO's need to take full responsibility for this mess. People are losing their jobs and not able to provide for their families because of their mistakes and not having the balls to turn it around much sooner. It's like watching a cancer patient slowly die. It's inevitable it will happen because discounting will be deep this end of financial year sales and it won't help the bottom line at all.
The consortium of banks certainly have a tight grip on the Bongs testicles. End of financial year all over red rover ..nope I dont think so, end of calendar year 2013 more likely.Reports of West 49 offered for $1 plus leases simply not true but a huge loss if it is sold off. BB is in big trouble no doubts about that.
Is it fixable....To quote Sir Humphrey Applebee...."it is indeed a very brave and courageous undertaking" but rapidly becoming the only option to save the company and its long suffering shareholders.
Debt liabilities I understand have ballooned to $316 million. To find most or all of that to keep the banks at bay needs significant sell offs of brands (its principal assets)
My reccommendation would be to cut staff by 40% immediately to prepare for the orderly sale of all retail operations.
I would also sell non core brands Dakine, RVCA, Von Zipper, Both online portals and reduce stocks immediately by 50% and reducing product lines to 2000 by not restocking discontinued lines. All these measures will payoff bank debts, improve the balance sheet and make BBG a much meaner, leaner operation.
Sponsorships and event funding needs to be cut by 90%.
Launa has nothing to report, changes are being introduced slowly...too slowly,
BBG selling expenses are the highest in the industry and the haemmorhage of cash needs to be curtailed or its curtains.
At the end of the day the company needs fewer than 200 select employees with a stable of brands that can claw back some of the goodwill attached to these brands and add value for shareholders.
The toe cutters need to take charge and turn this around.There will be redundancies, anger grief, tension the alternative is complete oblivion.
That said it is a big call and is quite detailed in its pathway to success, lots of T's to be crossed and i's to be dotted.
Anything but a fire sale or distressed asset sale. There is still underlying value to be captured if they dont blow it.
My thoughts, Launa has my proposal lets see if she runs with it.
I would love to see BBG live on, I think everyone is hoping for some miracle turn around.
Whether egos will let them listen to people like the barbarian is a different story...
If that article is right about Merchant's personal wealth he could just about pay the debt off single handed, but that might leave him down to his last $10 million which, presumably, would be too much to ask. A good captain goes down with his ship but I don't see that happening. Can't say I feel much sympathy or care too much about the outcome. What's the worst of it for your average surfer? A few less would be pros in the line up, a few less pro contests on Fuel? Why should anyone give a shit? Yes I can feel sympathy for those employees who work on the shop floor or in the warehouse, maybe even for the sales reps but then a lot of car workers stand to lose their jobs too! As for the middle managers and the sponsored surfers, you would have to be kidding. Not a shred. Not even much for the small investors, uplift has some strange ideas but he's on the money when he suggests staying out of the share market. Particularly, I would add for those who make their investment decisions with their hearts not their heads.
The major surf companies have traded on surfing's image and I suppose, if they are smart, the others might continue to do so but in the end, when you have convinced everyone between the ages of 5 and 75, when everyone surfs, then no-one is a surfer anymore. It becomes meaningless as a way of identifying yourself. You surf? So what? I have nothing in common with you, not the board you ride, the waves you seek, the clothes you wear. What is left to market then?
I would happily dance on Billabong's grave, but really why waste the energy?
Merchant is playing them all like guitars... At 15% ownership I wouldn/t be surprised is he doesn't end up with bigger slice of the pie once this deal closes. Ive known many a slimy/clever business man to run his company into the ground then buy it back at the fire-sale or receivership auction for 2c in the dollar of what the plant and equipment was worth, and then ends up debt free with the same shit! He's just culling the dead wood and will build it back up again how he wants it this time. Merchant will end up at the top of the heap once more. Half his luck.
Good on him !
Ecellent read Stu. Thanks for linking the article.
Anyone here remember Bre-X? How about Poseidon?
http://www.cbc.ca/archives/categories/economy-business/business/stranger...
The blokes over at Business Spectator have burst into poetry.
"Once some M&A bagmen camped outside Billabong
Under the shade of an imported pavement tree
And they sang as they watched and waited for the liquidators
You’ll come a schmaltzing private equity with me."
etc, etc
http://www.businessspectator.com.au/article/2013/6/7/retail/last-gasp-lo...
Why is this not getting any coverage in the surf media?
Surely parko / taj are worth a quote on what they think about their sponsor / livelihood going down the gurgle?
Unprecedented.....
The surf media would never cover it like the main stream media such as the papers because the surf mags get paid to advertise these companies such as Billabong, kustom, vz, rvca, Nixon, dakine, palmers and honolua. Just the budget alone for advertising 1 month would pay a normal wage for a year.
On another note Billabong should dump Pipe and there alone is a saving of 5 million. Get rid off all the surfers bar Parko and 1 other and that's a saving of 2- 3 million at least when contracts are up. If this is going to turn around it will want to happen Now!! All shop workers have been told to use their holidays ASAP apparently. So it's not a liability on the books. Billabong will never disappear but it will not go on as is with current management as any buyer would be hesitant to let them run it as history does not show a good result. I have no doubt Launa is thinking what the f.. have I taken on here. Well I can tell you a great company that made terrible decisions and that was consistently chasing growth because it was a listed company on the Asx. To stay cool you need to not sell out and that is what all the companies have done. That's why is really not cool to surf any more. As one previous comment said also. Good luck cause they will need it.
damo-b, you could be right,Friday 7/6/13, Billabong was @ 0.23c ! Can/will it go lower ?
Just checked ASX,BBG now @ 0.21c ! Penny dreadfuls anyone ?
u.s.a. market shows bong about 39 cents us
Things not so bright at Quiksilver either.
http://www.smh.com.au/business/quiksilver-plunge-to-hurt-billabong-20130...
The Bong not dead.....Long live the Bong......
Launa and the Board have started the turnaround program. I dont expect much in the way of notifications of any significance till around Christmas time. It is a shame that Silver are also copying BB almost identically, closing stores, selling brands, cutting back sponsorships both will hurt but both will survive.
The share price will go up and down like a yo yo as punters try to make a small killing on fluctuating prices.
No one in their right mind will attempt to takeover the Bong whilst it has massive debts, high stock levels, high operating costs and too many unprofitable retail outlets.
Instead of closing shops it would be far more intelligent to reduce staff, cut stocks, get the stores trading profitably and sell them off avoiding early lease termination costs and employee severance costs.
I will stick my neck out once again and this is purely my own opinion and not priviledged information but we have had four profit downgrades with more to come which is a poor reflection on the ability of this company to accurately predict its trading performance or be honest enough to present believable numbers rather than ambit figures that are no where near the mark. My guesstimate for financial year 2012/2013 EBITDA is $45-$50 million based on store losses, massive costs, the cost of the on again off again takeovers and the pressures on margins. Furthermore, I think there will be an operating loss of $25 million and further impairment writedowns and extraordinaries which may effectvthe share price.
People need to take a punt on BB and average down until things start to turn around and the company share price starts to pick up again probably in six months or so or they can take their tax loss rebates and bail.
Hang in there I say...The Bong is not dead...Long live the Bong....
That's all well and good UB, but with a share price of 19c what's the state of their banking covenants?
I would assume they are in breach of their bank covenants. The banks control the situation and may continue to do so for some time. As long as the Bong keeps getting bank debt reduced the banks would be foolhardy to pull the pin not that it hasn't stopped them before and banks really dont care how much they or others may lose.
To pull the pin now would see the Bong fire saled which is in no ones best interests.
It is being prepared for an orderly sale and will be within covenants shortly from my understanding and will continue to pay down debts, cut costs, sell assets and return to profitability.
16c? Wow.
I just bought a Billabong hat. Will that lift the share price?
If only I had gone ahead with my plan to write "SELL" on my Billabong t shirt two months ago! Just think, I could have been a stock market guru.
Meanwhile, Google shares are trading at over $900 each. It's amazing to think that in late 2008, you could have picked them up for the bargain price of about $260 each.
If you play with the big boys sometimes you get hurt. The market parasites and bottom feeders will pick up the remnants at a massive discount to their true worth destroying much of the value of the brands in the process. You used to be able to shoot thieves now we make them into millionaires.
Down to 13c now. Any guesses as to where it might bottom out?
...At the bottom...
If all of us chip in, pretty soon we could mount a hostile takeover
I bags Location Scout
My best guess is the SP will go sub 10 cents probably 8 cents.
Then I expect lots of,trades with some rises, a bit of profit taking
and quick in out back in again deals.
There are rumblings and murmurs around suggesting receivers will be appointed.
To early to call on that one. Amongst the Aussie banks CBA have appointed people to investigate options of last resort and it would be their style as would the other three in the consortia of aussie lenders.
Much of BB debt is in US Dollars and its strength may not help the BB cause at present.
Nothing from management is certainly not helping and something to reassure bankers investors and the public is certainly needed and needed now. Sales are still happening. I noticed shop trading hours
have been taken down from a number of outlets.
0.5c by the end of the week ? The Vultures are circling.
Im pulling a k out of the bank and buying Billabong shares tomorrow.
I think the share price will drop below ten cents this week so just watch before you buy
It is hard to pick how low it will go. 5 cents or even 1 cent is not beyond the realms of possibility.
spose bong drops to 5c, what does that make the company worth in dollars ? under 50 mill ? will greasy buy the lot and then split it up to clear the debt and pull a small profit ? possible do you think .
Never mind the company, what about Chopes and Pipe this year? What's the chances of them being left high and dry?
Hi udo. At 5cents the bong would be worth $24 million. Someone is buying shares but not enough to forcecan announcement, so probably speculating as the share price rises and falls people make a quick few thousand get out buy back in again and repeat the process.
All the analysts keep saying the non core brands are worth up to $200-$250 million. That is about s third of what they paid for them. Bit like when The Packers sold Channel Nine Network to Alan Bond for $900 million riddled with debt and bought it back for $200 million in a much better financial state. Dakine, Sector 9, West 49, Von Zipper, RVCA, Honolua and other non core brands may technically be worth a quarter of a billion bucks as a whole the vultures dont really want to be generous with offers right now when it might be possible to pick them up for a song if the bong goes under.
It is hard to guess the real numbers and I hope Launa makes some form of announcement this week on the state of play we can speculate blindly on how bad things really are. Personally, I believe in full and open disclosure for all public companies, clearly Launa and the Board share a different viewpoint.
The series of earnings downgrades is a point of issue. To get it so wrong so many times speaks of complete incompetance or the misguided belief that regular small downgrades will somehow soften the blow whereas a more honest approach would have been something like ...we are experiencing higher costs and reduced sales which we are endeavouring to turn around but we believe that EBITDA for this year will be significantly lower than previous years coming in around $50 million. Any ongoing improvements in trading results will see this amount increase.
You have to remember the bong has been allowed to fall into its current state and it will take time to turn that around....time that the company may just not have. The banks have a stranglehold on assets and revenue streams and will make absolutely sure that they are paid first. The bong has huge debts in relation to sales and its selling costs are twice and up to three times its competitors, they are locked into unfavourable leases, they are carrying far too much slow moving stock, and have too many products on offer in todays retail world. To rectify that will cost them dearly in redundancies, lease terminations, stock transfers apart from heavy discounting to remain competitive.
From my understanding 400 retail outlets are not contributing profits. That haemmorhage of cash needs stopping TODAY .....tomorrow is too late.....No one is going to takeover the bong in its present state, 6000 staff, total liabilities circa a billion dollars ......Launa and the Board need an aggressive and mercenery approach to fix this and that is not happening.....if it doesn't soon....it wont matter because there will be no second chances in this one - the bones will be picked clean for nothing by the circling vultures.
Talk about the Barbarians waiting at the gate, this Barbarian is saddened by what he sees and can do nothing to prevent.,
I am the eternal optimist....but my optimism is starting to slip away as the pointnof no return draws nearer and nearer.
It is like watching your football team get slaughtered and the coach does nothing but watches the massacre unfold.
Come on coach......time to make some moves.
It has now been confirmed that 3 of the 7 banks who have loaned BB around $400 million have sold their loans at a discount.
HSBC sold their $20 million loan to a Hong Kong Fund for 80 cents in the dollar taking a $4 million dollar hit.
CBA auctioned off their $65 million loan at 85 cents in the dollar taking a $10 million dollar hit selling it to Bank of America and Westpac confirmed that it sold its $60 million loan over the weekend at 90 cents in the dollar to US Centrebridge Hedge Fund Taking a $6 million dollar hit.
The McGrath Nichol report has now been presented to the banks and it may have raised some concerns over BB's earnings projections enough to cause them to take a discounted offer now rather than hold out for another twelve months when these loans are due to rollover.
$145 million of $412 million has been sold off so whether the other 4 banks will also take a hit now rather than wait remains to be seen.
The PE groups are back on the Gold Coast finalizing their proposed debt refinancing deal which will no doubt have punitive default clauses as loans convert to equity which is how these private equity funds operate.
It begs the question if BB is indeed struggling and may have difficulty meeting normal bank interest repayments why would they contemplate entering into a debt refinancing deal at 400-500 basis points above the current rates they are paying. The company has always said that there is no guarantee an acceptable refinancing plan will be presented to the Board. Quiksilver is in a very similar position to the Bong, burdened with high levels of debt, falling sales, a large number of marginal or loss making shops, high selling costs and massive write downs or impairments of brands snd goodwill. It has not made profits in four years yet for some peculiar reason has been reccommended by several US Analysts as market outperform and buy and is selling at over $6 per share compared to net assets of $3.20 per share.
That I do not understand at all.
billabong currently 26cents.
All banks are now out having sold their stakes for a discount. Now the fodder of hedge funds and private equity firms. Divestement seems the only option. Parallels being drawn with Pacific Brands (Bonds undies etc)
It's funny when companies enter this phase, it becomes a gambling chip (although it's all pretty much gambling, when you think about it). The price will be traded bouncing up and down all over the place while people try to pick the peaks and troughs
First cab off the rank showcasing Billabong's new direction has just been unveiled: tribal-inspired bikinis.
http://www.goldcoast.com.au/article/2013/07/09/454291_gold-coast-news.html
This article in The Weekend Australian suggests Billabong's business is already on the improve (but only in the USA).
http://www.theaustralian.com.au/business/companies/billabong-spirits-lif...
Another trading halt on BBG shares:
"Troubled surfwear retailer Billabong International has entered a trading halt ahead of an update on the outcome of talks with former suitors over assets sales and refinancing. The group requested the halt until Thursday morning at the latest."
http://www.businessspectator.com.au/news/2013/7/16/billabong-trading-halt
Deal is done.
Altamont now in charge, Inman sacked, Scott Olivet (ex Oakley) new CEO, DaKine sold for $70m.
http://asx.com.au/asx/statistics/announcements.do?by=asxCode&asxCode=bbg...
Holy shit. Massive news!
Best possible result in all the circumstances. Naude and Inman the biggest losers, but Greasy's had a big haircut too. At least some of the employees will still have jobs.
Hope the shareholders don't dither - 35% interest payable on a fair chunk of the working capital until the option part of the deal is approved. Then 12%. Much better. Especially given the cash rate is under 3%.
Good money if you can get it. As for the rest of the deal, Altamont must be breaking out the Moet as we read.
whaaat, with many a company and consumer theses day doing refi's at all time record low long term rates closer to 300 basis points, BBG's handing over DaKine, and saddled with debt at 12%, the Alt folks must be swimming in Olympic pool sized quantities of the name brand bubbly you've mentioned.
Junk. redefined.
Ah, the sound of sucking air..... BBG's mgmt purchased Da Kine back in the summer of 2008. Price tag 100 mil.
What's the Australian strine for haircut?
Haircut
And Rolls, you know that I was being droll about 12% being much better, right?.
I didn't pick that up until now whaaaat, intonation is lost on the interweb. I can't even pretend to understand the mechanism of refinancing, but 12% pa, interest paid in cash quarterly? No death by a thousand cuts here, sounds like a gaping, sucking flesh wound.
I don't think they're out of the woods yet and lean times lay ahead.
Looks like they picked the right bloke to steer it though, hope it plays out.
Yeah, sorry Zen. My keyboard actually gummed up with all of the sarcasm I was dripping.
This deal is typical barbarian: put funds in to deal with bank debt and provide working capital, but heavily caveated and at huge cost. Pick your own CEO and place enough members on the board to have a big say and keep malcontents read: Greasy) in line. If the turnaround works, there's sufficient exercisable options to gain majority ownership (read: around 46% or slightly more) to sell at a huge profit; if it doesn't, well, you've still made a shitload of cash and PIK for being the short-term financier.
This is primarily because of the decision in 2006/7 to go vertical. Which in turn was a corollary of needing to chase growth at all costs to provide returns to ravening shareholders. Instead of being content to just remain a core surf brand, true to its original raison d’être.
Classic commentary again Whaaat!
Also a great breakdown in layman's terms.
Regarding going vertical, very similar to the way Quiksilver tried to dominate the global extreme sports market outside of surf and failed with the purchase of Rossignol.
Greed seems to never prosper unless done smartly/tactically.
Thanks Mr. Whaaaat,
I never get tired listening to people you can learn from.
Thanks for the input Whaaat. I've closed the comments in this article as a new Billabong article has been posted. See http://www.swellnet.com.au/news/3749-billabong-get-thrown-a-lifeline