Chiff and Fipple Forums

We could also include this in the thread on bad headlines:

Mythical guitar-maker Gibson fighting for survival.

I think they were thinking "legendary" ... not "mythical". Different thing entirely.

Tunborough wrote:I think they were thinking "legendary" ... not "mythical." Different thing entirely.

I'd agree, though it's not the worst misuse of the English language I've heard. The tone of the article you posted makes me wonder if Gibson is about to go under.

Corporate shenanigans. The guitar biz is sound, but they got suckered into buying Philips in 2014, just as the audio business was being wiped out by hi tech. Gibson is not a hi tech company; it's difficult to see what value they could have added to Philips that would enable them to compete in the iAudio market.

I had no idea Gibson bought Philips.. why on earth did they do that. On the other hand:

Gibson bought Philips, a Dutch entertainment brand, in 2014 for $135 million.

$135 million? Can't be all of Philips.. it sounds like a tenth of a tenth of a percent of Philips. So I'm not sure exactly what they bought.

(If Gibson goes under, does that mean my mint Les Paul, which I don't use, will make me rich?)

I dunno. Philips is known for, what? High end analog audio components and inventing the CD. And a bunch of other electric devices, all of which are being made cheaper in China. None of that seems all that valuable to me these days. I suspect that price was for the whole show. All the CD patents must have expired by now, so there's no money in being a patent troll or mining the Philips IP. I suppose there's some value in the the name, so Gibson could buy electronics from China and slap the Philips brand on them, but there's no future in keeping the Dutch engineering and R&D shop going: Chinese engineers are just as able, and likely a quarter the price.

There's still room to come up with an innovative iAudio product that would gain instant cred by having the Philips name, but Gibson isn't the obvious company to execute such a plan. What do they know about code?

Old news, I know, but they should never have left Kalamazoo, unless they were prepared to take their luthiers(with their tools) with them!

Philip's revenue in 2016 was more than 24 billion euros, so I still doubt that it could be bought for $135 million..
Profits 1.4 billion euros, assets 32 billions.

Tor wrote:Philip's revenue in 2016 was more than 24 billion euros, so I still doubt that it could be bought for $135 million..
Profits 1.4 billion euros, assets 32 billions.

Yet the evidence says they were. Whoever owned them in 2014 certainly saw Gibson coming.

It looks like the balance sheet proves otherwise. Billions of negative profit revenue don't add to the value of a company.

There's only one dutch Philips company as far as I know? Because this doesn't add up. What evidence? Anything I can find (including their 2017 report) describe profits, not losses, and >100000 employees.
It doesn't make any sense that a minor company like a guitar maker should be able to buy them for less than peanuts.

s1m0n wrote:

Tor wrote:Philip's revenue in 2016 was more than 24 billion euros, so I still doubt that it could be bought for $135 million..
Profits 1.4 billion euros, assets 32 billions.

Yet the evidence says they were. Whoever owned them in 2014 certainly saw Gibson coming.

It looks like the balance sheet proves otherwise. Billions of negative profit revenue don't add to the value of a company.

Yeah ...

...but no. Tor is absolutely correct. Gibson did not "buy Philips for $135m". They agreed, in 2014, to buy just the audio video division of Philips, which was, in Philips' terms, a tiny part of their business. Hence why it cost just $135m, although previously Philips had agreed a deal with Funai to sell it for $150m. The transfer only took place last year, in accordance with the 2014 agreement.

Philips itself remains a highly profitable company, and its share price remains close to record highs.

From what I know about it, I would have thought that the acquisition of Woox (the name given to the A/V division of Philips that Gibson bought) should have given Gibson a much needed boost. But often it depends on the ability of the acquiring company to capitalise on its acquisitions.

[Cross-posted]

Tor wrote:There's only one dutch Philips company as far as I know? Because this doesn't add up. What evidence? Anything I can find (including their 2017 report) describe profits, not losses, and >100000 employees.
It doesn't make any sense that a minor company like a guitar maker should be able to buy them for less than peanuts.

See my post above.