Harley Davidson Financial Woes

Message

koji52 · #21 Unread post by **koji52** » Fri Jan 30, 2009 2:29 am

Correct. Long positions in a stock mean that you are expecting the price to rise. Short positions expect the stock to fall. It's a normal part of investing and it is required for anyone in a place of "information power" to disclose if he or she has a position in the stock.

Although it makes no sense for HD to pay out dividends in a downturn and finance those dividends with debt, you can't automatically assume that all of HD's finance receivables are going to suffer impairment charges like the author stated. While other securitized forms of receivables are a good measure of pricing, when these things are bought and sold, the quality of the debtor is also factored in. If HD loaned out money to subprime borrowers, then yes I'd be worried for the company. But if the typical rich white collar poser biker stereotype, which I see too many harp on about, holds true, then I think HD is fine.

Securitizing receivables is about making money and spreading the risk. I don't think it's correct to assume that holding loans receivable on your books is a bad thing. As long as they continue to collect on them, their liquidity will be fine.

HYPERR · #22 Unread post by **HYPERR** » Fri Jan 30, 2009 4:30 am

Oh great. Are they going to drag down MV along with them?

jstark47 · #23 Unread post by **jstark47** » Fri Jan 30, 2009 4:56 am

HYPERR wrote:Oh great. Are they going to drag down MV along with them?

MV had done a good job dragging themselves down prior to the buy out. Harley was their white knight. MV was losing money, and had basically ceased assembly operations in 2008. Without Harley or a similar new partner, MV would have ceased to exist by now.

HYPERR · #24 Unread post by **HYPERR** » Fri Jan 30, 2009 8:38 am

jstark47 wrote:
HYPERR wrote:Oh great. Are they going to drag down MV along with them?
MV had done a good job dragging themselves down prior to the buy out. Harley was their white knight. MV was losing money, and had basically ceased assembly operations in 2008. Without Harley or a similar new partner, MV would have ceased to exist by now.

Ironically two of the bikes that I really like right now are the HD XR1200 and the MVA Brutale.

JC Viper · #25 Unread post by **JC Viper** » Fri Jan 30, 2009 6:21 pm

RhadamYgg wrote:They can always divest themselves of the financial arm - and find someone to buy it for pennies on the dollar owed.

It will damage their ability to sell bikes, though - not having their own lending arm.

RhadamYgg

HD did that back in the late 60's when they were bought by a bowling company AMF (ok not only known for bowling but right now it seems to be).

Maybe it was a mistake for HD to buy MV Augusta.

RhadamYgg · Sat Jan 31, 2009 1:18 am

JC Viper wrote:
RhadamYgg wrote:They can always divest themselves of the financial arm - and find someone to buy it for pennies on the dollar owed.

It will damage their ability to sell bikes, though - not having their own lending arm.

RhadamYgg
HD did that back in the late 60's when they were bought by a bowling company AMF (ok not only known for bowling but right now it seems to be).

Maybe it was a mistake for HD to buy MV Augusta.

You know the hospital I work for just recently bought another hospital. Any time a company does something like that - and this hospital has been around for over 100 years - it is always a question if the new company can survive. Will it do the right things or make huge dollar cost mistakes.

It is probably the same thing with HD and MV.

These thoughts are propigating beyond that one side though - here is a somewhat more respectable source on the subject: Forbes .

This article has some more information than the other one.

RhadamYgg

FireguyQ3D · Fri Feb 06, 2009 4:45 am

Interesting thread about HD and the economy here. Thanks.

RhadamYgg · Fri Feb 06, 2009 5:15 am

FireguyQ3D wrote:Interesting thread about HD and the economy here. Thanks.

There is a good side to this - apparently a company has purchase HDs debt - so they will surive at least for a little while longer.

But it may also mean that they are no longer in full control of the company.

That can be good or bad - I guess we'll see.

koji52 · #29 Unread post by **koji52** » Fri Feb 06, 2009 7:25 am

Debt holders have zero control over a company's operations.

I don't think HD's going anywhere.

MotoEdge · #30 Unread post by **MotoEdge** » Fri Feb 06, 2009 8:01 am

Having been a professional trader for years, I can tell you for a fact that stocks are driven emotionally by investors, not the actual numbers on how a company performs. Day to day, stocks are traded purely on greed or fear with the media manipulating for good measure

Stock lesson aside...HD buying MV may or may not be a good move, however there's a quote from John D. Rockefeller, "The way to make money is to buy when blood is running in the streets". This may be one of those times.

Is HD doing so bad? I just came from Destination Daytona here in Florida, and this morning the sales booths were packed with credit applications in hand with people rolling out the door like it's a factory. Granted there is an event going on this weekend but if you've ever been to this place, you realize it's crazy because Rossmeyer runs a slick organization.

People still want what they want....and I don't think there's a shortage of people who want Harley's