Posted: Mon Jul 16, 2012 2:53 pm
Ouch this hurt to read while looking for a bicycle.
04-19-09, 04:20 PM
I hate to be the nay-sayer in the discussion, but we the consumers are to blame for Cannondale moving off-shore. We demand more and more for less and less. We have tools at our disposal that allows us to shop for the best products, the best price without even leaving the confines of our comfy chair or via a stokers seat on their cell. We leave our local shops in the dust as we try to save a couple of bucks. (No I am not a shop-owner)
As investors we demand our investments to increase in value and produce better returns. With all of this in mind what is a company to do. To survive based on our demands (Investors and Consumers) they have to find low cost production facilities. The only way we can stop this madness is to accept higher prices. However as we are all capitalist we look out for ourselves.
I hate to be a naysayer to a fellow naysayer but there is more to the Cannondale story than you've taken the time to learn. I own two Cannondale tandems, a Cannondale mountain bike, and a Cannondale 3.0 road bike, and I used to own BIKE (Cannondale stock) before the original bankruptcy.
I'm 6'7", have a 100cm inseam, and everything else I've ever ridden feels like spaghetti at the bottom bracket. While many people love to rave about how 'steel is real', the truth is that a partiuclar frame material is not "best" for everyone. A guy who is five feet nothin' and a hundred pounds dripping wet can't begin to imagine how a frame feels to me, or what real bottom bracket flex is like. I weigh more than some diminutive captain/stoker teams, keep in mind.
I love Cannondale, but what went wrong was malfeasance on the part of Joe Montgomery and the board of directors. Joe Montgomery (then CEO of Cannondale and the largest shareholder) wanted to build a multi-million dollar house. Only he didn't want to have to pay for it by selling shares of Cannondale stock. So the board of directors of Cannondale agreed to divert millions of dollars from the Cannondale coffers to build Joe's house in what was called a 'swingline' loan. This occurred when Cannondale was cash poor and attempting to go into new markets with the innovative motorcycle/atv line. The whole idea was that the Board of Directors didn't want Joe to default on a home loan secured by his Cannondale stock to a private bank and have that stock liquidated to pay off his loan. That would mean Joe didn't control the Cannondale stock with a majority, and thus couldn't control the company or handpick his board members. So Joe, and his Board agreed to compromise Cannondale's financial solvency to give Joe a multi-million dollar home without having to risk losing his Cannondale shares to a public liquidation. Why the concern, because Joe, and the Board, having inside knowledge knew that the stock valuation was going to tumble based on financial difficulties the company was having related to the motor division. So the people Joe hired, and paid, agreed to mortgage the future of Cannondale, in a corporate "bust-out." The board knew that if Joe lost majority control they would be ousted over the failures of the motor division experiement.
Joe got his multi-million dollar house and only lost worthless Cannondale stock. He couldn't have unloaded that much Cannondale stock to actually finance the house without SEC filings, thus affecting valuation. The Board got millions in additional compensation, and Cannondale was bankrupt.
All of this occurred when several million dollars would have prevented Cannondale from entering reorganization in the first place.
Cannondale's demise isn't to be blamed on customers buying cheaper brands or online purchases. Cannondale doesn't care if you buy online or from a dealer (they get the exact same price - wholesale).
Cannondale, after multiple reorganizations, and trips through bankruptcy is going offshore because of corporate malfeasance. Its the Enron of the bicycling world.
04-19-09, 04:20 PM
I hate to be the nay-sayer in the discussion, but we the consumers are to blame for Cannondale moving off-shore. We demand more and more for less and less. We have tools at our disposal that allows us to shop for the best products, the best price without even leaving the confines of our comfy chair or via a stokers seat on their cell. We leave our local shops in the dust as we try to save a couple of bucks. (No I am not a shop-owner)
As investors we demand our investments to increase in value and produce better returns. With all of this in mind what is a company to do. To survive based on our demands (Investors and Consumers) they have to find low cost production facilities. The only way we can stop this madness is to accept higher prices. However as we are all capitalist we look out for ourselves.
I hate to be a naysayer to a fellow naysayer but there is more to the Cannondale story than you've taken the time to learn. I own two Cannondale tandems, a Cannondale mountain bike, and a Cannondale 3.0 road bike, and I used to own BIKE (Cannondale stock) before the original bankruptcy.
I'm 6'7", have a 100cm inseam, and everything else I've ever ridden feels like spaghetti at the bottom bracket. While many people love to rave about how 'steel is real', the truth is that a partiuclar frame material is not "best" for everyone. A guy who is five feet nothin' and a hundred pounds dripping wet can't begin to imagine how a frame feels to me, or what real bottom bracket flex is like. I weigh more than some diminutive captain/stoker teams, keep in mind.
I love Cannondale, but what went wrong was malfeasance on the part of Joe Montgomery and the board of directors. Joe Montgomery (then CEO of Cannondale and the largest shareholder) wanted to build a multi-million dollar house. Only he didn't want to have to pay for it by selling shares of Cannondale stock. So the board of directors of Cannondale agreed to divert millions of dollars from the Cannondale coffers to build Joe's house in what was called a 'swingline' loan. This occurred when Cannondale was cash poor and attempting to go into new markets with the innovative motorcycle/atv line. The whole idea was that the Board of Directors didn't want Joe to default on a home loan secured by his Cannondale stock to a private bank and have that stock liquidated to pay off his loan. That would mean Joe didn't control the Cannondale stock with a majority, and thus couldn't control the company or handpick his board members. So Joe, and his Board agreed to compromise Cannondale's financial solvency to give Joe a multi-million dollar home without having to risk losing his Cannondale shares to a public liquidation. Why the concern, because Joe, and the Board, having inside knowledge knew that the stock valuation was going to tumble based on financial difficulties the company was having related to the motor division. So the people Joe hired, and paid, agreed to mortgage the future of Cannondale, in a corporate "bust-out." The board knew that if Joe lost majority control they would be ousted over the failures of the motor division experiement.
Joe got his multi-million dollar house and only lost worthless Cannondale stock. He couldn't have unloaded that much Cannondale stock to actually finance the house without SEC filings, thus affecting valuation. The Board got millions in additional compensation, and Cannondale was bankrupt.
All of this occurred when several million dollars would have prevented Cannondale from entering reorganization in the first place.
Cannondale's demise isn't to be blamed on customers buying cheaper brands or online purchases. Cannondale doesn't care if you buy online or from a dealer (they get the exact same price - wholesale).
Cannondale, after multiple reorganizations, and trips through bankruptcy is going offshore because of corporate malfeasance. Its the Enron of the bicycling world.