Triumphrat

Sofiaspin · 02-03-2009, 05:54 PM

OK time to forget the dating thread, time to think about Warren Buffett (is that prounounced boofay?) plunging $300m into Harley.

That is ooohhh what, around £200 million of Brit cash?

If I was Harley, I would feel the noose tightening around my neck...

Further cements Triumph's strong Independent position perhaps?

Here it is, from the trusted BBC...

Harley-Davidson gains $600m boost

Harley-Davidson is cutting production by up 13% in 2009

Motorcycle firm Harley-Davidson has secured a $600m (£418m) cash injection, including $300m from billionaire investor Warren Buffett.
The funds will help the iconic US firm improve its cash base, after losses in its financing arm saw it post a 58% fall in profit for October to December.
The other $300m comes from investment group Davis Selected Advisers (DSA), Harley-Davidson's biggest shareholder.
Harley-Davidson announced last month that it is cutting 1,100 jobs.
This represents more than 12% of its workforce. It is also trimming production by up to 13% this year.
Generous interest
The announcement of the fresh investment saw shares in the Milwaukee-based company rise as much as 23%.
Mr Buffett's Berkshire Hathaway company and DSA will be paid an annual interest of 15% for their investment.
It is just the latest big investment made by Mr Buffett, 78, as the US economic downturn has worsened.
Towards the end of last year he bought $5bn of shares in US bank Goldman Sachs, which also needed additional funds to improve its finances. "Harley's finance arm needs capital in a highly constrained credit environment," said Ed Aaron, an analyst at RBC Capital Markets. "We knew capital would be available at a price."

joeswamp · 02-03-2009, 05:58 PM

15%(!!) Ouch, that is some expensive cash...

Warren is becoming a loan shark to US companies.

Sofiaspin · 02-03-2009, 06:04 PM

Wow I missed that - too right, worse than loan shark - more an upleasant criminal.
At 78? I mean does he not have a life for gawds sake?
More fool Harley for signing up - surely there must be better options?
Give boofay a good kicking up the rear is my view.

jhawk · 02-03-2009, 06:11 PM

@ 15% APR .... the old guy must be part shark.....

richb · 02-03-2009, 06:57 PM

100% Great White, with teeth to match. And he'd probably describe himself as being 'charitable', bailing out a US business, iconic marque, and all that.
I suppose it's mildly optimistic news, since to the rest of us, a Harley is a "luxury item" (definition: you don't need one, but since you've got a load of spare cash lying around you might as well get one). Buffett clearly thinks the US economy is going to recover sooner rather than later. If he thought later, he would have held fire and offered them cash at 25% in six months' time.

tba-golfer · 02-03-2009, 07:13 PM

Warren sees some long term value here, but HD's cash pain has only started. They probably need another 400b to save their finance division.
You can kiss the common stock dividend goodbye.
New bike sales? The aftermarket is being flooded with repos and barely used hogs riden by dentists who have seen their dreams of retirement swirled down the spit bowl.
I'll start getting interested if it trades at a single digit price.

koifarm · 02-03-2009, 07:36 PM

It looks like all those bikes that were bought as a toy when money was flowing like a river, got ridden a few times, and put away are now more of a burden to the checkbook via payments, that folks are starting to cut down on finances and bikes are likely the first ones to go....along with third cars, mistresses, vacations to Mexico, Europe and the islands.
America is closing up the purse strings folks, the ripple effect is visible on a global scale.
The next few years are gonna be a rough sled ride for everyone....
The rich guys can afford to throw millions around just to fish for interest rates on it.....while the rank and file do their taxes and send money to the government to continue to enable the politicians to play war and peace.....
Grumble Grumble Grumble....

tba-golfer · 02-03-2009, 07:44 PM

Cut back on mistresses?
Say it ain't so...

Sal Paradise · 02-03-2009, 08:09 PM

If i can borrow at 5%, what does it say about HD that they pay 15%????

What will they finance bikes at? 18% ? How may takers will they get? I know lot of HD owners I ride with are financed. Hd is in big trouble.They will survive but I wouldn't buy any of their stock. I might pick up one of them dentist bikes though.

Wow who would have thought financing $20k blinged out 2 wheeled tractors to flamboyant gangs of costume pirates wouldn't last? Huh!!

HiDesert · 02-03-2009, 09:50 PM

Oh, come on guys, the gubmint is magically manufacturing money; we'll be right as rain in no time! It's not like those billions they're spending to get us spending have to actually come from somewhere!