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... decided to split the business in two. Sell off the non-piano instrument division and keep the piano business public. Now the piano business is expected to g

by antr 13y ago

... decided to split the business in two. Sell off the non-piano instrument division and keep the piano business public. Now the piano business is expected to go private. That implies that the value of the sum-of-the-parts is less than the value of both businesses running independently. Why? Well, for starters it seems there isn't that much public investor understanding of how this company works, its market, etc, and a good indication is that only one equity analyst (of a not that well known broker) covers the stock. Additionally, the reporter says the the real estate where the office/factory is, is extremely valuable (implying that such asset isn't priced in correctly in the value of the stock - god knows the book value of the land/real estate, a market sale can generate a considerable one-off dividend).

joezydeco 13y ago
My warning bells went off when the article mentioned the real estate value. I'm predicting someone will scoop up the company, develop the real estate, and attempt to relocate the entire company to a new cheaper facility somewhere nearby. But Steinway will most likely lose something special in the process of moving either through attrition or morale or just plain ol' disrupting the assembly line and the company will never be the same afterward. I was reminded of the story of the Vienna Sausage factory in Chicago, our most famous brand of Chicago hot dogs. They moved to a new facility and instantly had a quality problem with their hot dogs. Luckily, it was tracked down: "The reason, which they only figured out while chatting about the old days, was Irving who didn’t make the move to the new plant, but who had wheeled the hot dogs from the manufacutring room to the smoke house. The thing was that this took a while and served as a cooling period because it took 30 minutes to do the walk through the twisting factory. There was no Irving at the new plant – there was no need – and it was Irving’s trip was the secret ingredient. So they built a new room to leave them in and cool and that new addition was to recreate teh effect of Irvings walk."[1] [1]: http://inreblog.com/2008/12/19/in-re-irving-the-secret-ingredient-in-vienna-hot-dogs/ http://inreblog.com/2008/12/19/in-re-irving-the-secret-ingre...

by antr 13y ago

joezydeco 13y ago

My warning bells went off when the article mentioned the real estate value. I'm predicting someone will scoop up the company, develop the real estate, and attempt to relocate the entire company to a new cheaper facility somewhere nearby. But Steinway will most likely lose something special in the process of moving either through attrition or morale or just plain ol' disrupting the assembly line and the company will never be the same afterward. I was reminded of the story of the Vienna Sausage factory in Chicago, our most famous brand of Chicago hot dogs. They moved to a new facility and instantly had a quality problem with their hot dogs. Luckily, it was tracked down: "The reason, which they only figured out while chatting about the old days, was Irving who didn’t make the move to the new plant, but who had wheeled the hot dogs from the manufacutring room to the smoke house. The thing was that this took a while and served as a cooling period because it took 30 minutes to do the walk through the twisting factory. There was no Irving at the new plant – there was no need – and it was Irving’s trip was the secret ingredient. So they built a new room to leave them in and cool and that new addition was to recreate teh effect of Irvings walk."[1] [1]: http://inreblog.com/2008/12/19/in-re-irving-the-secret-ingredient-in-vienna-hot-dogs/ http://inreblog.com/2008/12/19/in-re-irving-the-secret-ingre...