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Author Topic: Entire threads disappearing?  (Read 12363 times)

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« Reply #25 on: April 09, 2011, 04:30 »
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I suppose you guys could be right about a sale sometime soon. But I should have thought that an IPO would be very unlikely.

Why would they sell it as a part finished transformation ? Why not wait until the transformation is more complete?
« Last Edit: April 09, 2011, 05:43 by bunhill »


« Reply #26 on: April 09, 2011, 07:51 »
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I imagine it only gets uglier after a sale, if  the new owners find out that the real, baseline profitability isn't what they were led to believe.  Since they just made a bigger mistake than the previous owners, they have to take even more extreme measures, especially if they 'leveraged' themselves just a bit to make the acquisition.  

Great point. I left my account open, just in case new owners came in with a more sensible gameplan. But your scenario seems more likely, and my attempt at keeping a foot in the door is likely to be futile.

« Reply #27 on: April 09, 2011, 08:09 »
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I suppose you guys could be right about a sale sometime soon. But I should have thought that an IPO would be very unlikely.

Why would they sell it as a part finished transformation ? Why not wait until the transformation is more complete?

I think they are...from my personal experience anyway.  When our corporate leaders decided we were putting ourselves up for sale, the "enhancing of the books" was a priority for three years before we sought buyers and made our intentions public.  So perhaps they are going through these pains now but won't formally announce anything for the next 36 months or so.  My guess is, assuming there is an impending sale or IPO, that they are rushing to get things as optimized as possible from a web site functionality viewpoint and that the continuing policy changes are meant to pad the financials, as is the best match changes they keep doing by prioritizing Vetta and Agency.

To be fair to Istock, I have ZERO knowledge of anything like this happening over there, only that the symptoms of a sale do exist.

« Reply #28 on: April 09, 2011, 08:26 »
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Nah! Nobody is going to buy a company by mistake. That's daft :)

EDIT: sorry not responding to the post immediately above

Think about it. You don't buy things because they are rubbish.

If it were to be sold then that would surely be a vote of confidence. And it will be all about continuity. My guess is that even if it were all to be sold not much would change.
« Last Edit: April 09, 2011, 08:30 by bunhill »

« Reply #29 on: April 09, 2011, 08:35 »
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To be fair to Istock, I have ZERO knowledge of anything like this happening over there, only that the symptoms of a sale do exist.

You mean they want the business to be ticking along nicely, optimized and running properly ? If so then surely that makes sense anyhow, sale or no sale?

If I paint my house and fix the fence it doesn't mean I'm planning to sell it.

« Reply #30 on: April 09, 2011, 08:40 »
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If I paint my house and fix the fence it doesn't mean I'm planning to sell it.

But if you paint over the cracks in your foundation, that's a pretty good indication that you're trying to hide major flaws.  If you were in it for the long haul, you'd fix the problems rather than trying to paint over them.  None of iStock's actions suggest a long term strategy.

« Reply #31 on: April 09, 2011, 09:00 »
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My guess is that even if it were all to be sold not much would change.

Right. Because *nothing* changed after Getty bought it...

lisafx

« Reply #32 on: April 09, 2011, 12:12 »
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My guess is that even if it were all to be sold not much would change.

Right. Because *nothing* changed after Getty bought it...

Took the words right out of my mouth Carolyn :)

« Reply #33 on: April 09, 2011, 12:18 »
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My guess is that even if it were all to be sold not much would change.

Right. Because *nothing* changed after Getty bought it...

AFAIK nobody is suggesting that Getty is planning to sell iStockphoto.

« Reply #34 on: April 09, 2011, 12:27 »
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My guess is that even if it were all to be sold not much would change.

Right. Because *nothing* changed after Getty bought it...

AFAIK nobody is suggesting that Getty is planning to sell iStockphoto.

Well, since they are all owned by H&F who knows. They could sell Getty and ISP as seperate entities, or as one package. Either way, iStock will have a new owner, because Getty doesn't really "own" iStock anymore, does it? H&F does.

donding

  • Think before you speak
« Reply #35 on: April 09, 2011, 15:59 »
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I don't think iStock is losing money and by reducing commissions they are making more. An investment firm has to make it look the best it can to take home a larger chunk. Think about it...wouldn't you invest more in a company that shows a profit of 2 million than one that shows profit of 1 million? Their goal could be to make 2 million so they can get X amount profit from a sale. iStock is making money...there is no way they aren't...the question is how much profit has to be there in order to maximize the profits from the sale. That's the question.

« Reply #36 on: April 09, 2011, 23:51 »
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I think their actions to produce a short term boost in profits makes a sale more likely than some sort of long term sustainable strategy. What they are doing now is not sustainable (by my understanding of the word, not how they used it last year to renege on their earlier deals).

Sure maybe they think they can just squeeze IS and suddenly their profits will go up forever, but what is happening now suggests a quick boost to the bottom line with no concern about what happens in the longer term future. That to me suggests a sale, some sort of pump and dump strategy.

I have no idea what H&F, Getty, or IS are really thinking or planning. I wish I did. This is just my take on what I have seen.

Hopefully if they are sold, the new owners have a more realistic idea of what is sustainable both for them and for us. (I can dream, can't I?)

jen

« Reply #37 on: April 10, 2011, 10:44 »
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I would like to believe that anyone who buys the company would do their research first.  I hardly doubt any buyer is just going to say "this number is bigger than this number, I'll take it!!!"

Anyway, this is how rumors get started.

jbarber873

« Reply #38 on: April 10, 2011, 12:00 »
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   One of the reasons private capital buys a public company is that actions do not have to be reported quarterly for shareholders and competitors to see. Most private hedge funds believe that they have the expertise to streamline and turn around management. In this case, the buyers seem to have put a lot of faith in the present management, and I'm sure they can't be happy with the results, hence the pressure to get the numbers up, no matter what. Any possible private capital buyer would have to feel that they could throw out old management and do better with a new team. While many here might think that is a great possibility, I doubt that there is much in the way of a talent pool to take over from the present management. I can't think of anyone, not that I have given it much thought. The management of Getty was brought down by a sea change in the rights managed business, and that can't be turned back. To me, that leaves an IPO, on the theory that retail investors will just look at a stream of rising numbers, and see happy days ahead. Once the present owners cash out, they could care less what happens 3 quarters down the road. We're in a rising bull market, tech companies are hot, and the low returns on bonds make the stock market the only place to reach for yield. It's the perfect time.

donding

  • Think before you speak
« Reply #39 on: April 10, 2011, 12:39 »
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   One of the reasons private capital buys a public company is that actions do not have to be reported quarterly for shareholders and competitors to see. Most private hedge funds believe that they have the expertise to streamline and turn around management. In this case, the buyers seem to have put a lot of faith in the present management, and I'm sure they can't be happy with the results, hence the pressure to get the numbers up, no matter what. Any possible private capital buyer would have to feel that they could throw out old management and do better with a new team. While many here might think that is a great possibility, I doubt that there is much in the way of a talent pool to take over from the present management. I can't think of anyone, not that I have given it much thought. The management of Getty was brought down by a sea change in the rights managed business, and that can't be turned back. To me, that leaves an IPO, on the theory that retail investors will just look at a stream of rising numbers, and see happy days ahead. Once the present owners cash out, they could care less what happens 3 quarters down the road. We're in a rising bull market, tech companies are hot, and the low returns on bonds make the stock market the only place to reach for yield. It's the perfect time.

Exactly what I was going to say. H&F invested in a company to turn around in three years and they could care less who's toes they step on...all they want is the profit from their investment. They would have no reason to hold on to it...cash out ...make their profit and on to the next investment, that's how these companies work.

« Reply #40 on: April 10, 2011, 16:43 »
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Seems to me H&F basically sold Getty last fall.  They could not find a buyer or pull off an IPO so "Hellman & Friedman is paying itself $500 million after borrowing $1.3 billion for portfolio company Getty Images."
http://blogs.reuters.com/columns/2010/11/03/short-memories-finance-private-equity-payouts-2/]

Credit to jsnover for posting this originally.
http://www.microstockgroup.com/general-stock-discussion/photos-from-gettyimages-direct-to-thinkstock-ouch/msg194494/#msg194494

So if I'm reading this correctly, H&F borrowed $1.3 billion backed by Getty's assets, which would show up on the Getty balance sheet making it too ugly to pull off an IPO or sell.  

Now Getty needs as much cash flow as it can get to pay off the bonds, so it decides we are unsustainable.  Getty's income before interest has to be way less then $1.3 billion per year, so they will really struggle for a number of years to pay this off.  If they can't, the bond holders take the company, but H&F keeps the $500 million
« Last Edit: April 10, 2011, 16:53 by Sadstock »

donding

  • Think before you speak
« Reply #41 on: April 10, 2011, 17:06 »
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Seems to me H&F basically sold Getty last fall.  They could not find a buyer or pull off an IPO so "Hellman & Friedman is paying itself $500 million after borrowing $1.3 billion for portfolio company Getty Images."
http://blogs.reuters.com/columns/2010/11/03/short-memories-finance-private-equity-payouts-2/]

Credit to jsnover for posting this originally.
http://www.microstockgroup.com/general-stock-discussion/photos-from-gettyimages-direct-to-thinkstock-ouch/msg194494/#msg194494

So if I'm reading this correctly, H&F borrowed $1.3 billion backed by Getty's assets, which would show up on the Getty balance sheet making it too ugly to pull off an IPO or sell.  

Now Getty needs as much cash flow as it can get to pay off the bonds, so it decides we are unsustainable.  Getty's income before interest has to be way less then $1.3 billion per year, so they will really struggle for a number of years to pay this off.  If they can't, the bond holders take the company, but H&F keeps the $500 million


 I don't know how those big boys operate but I know when we had our corporation dividends were payed out quarterly. If that is how they do...which is more than likely the case....at 500 million a quarter, that's 2 billion a year. At three years that's 6 billion dollars they collected in dividends. Dividends are usually calculated on profits. Don't know if that is the case here but if they sell it's pure profit on their part.

Edit...thanks for the link also...that was a nice read.

jbarber873

« Reply #42 on: April 10, 2011, 18:04 »
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Seems to me H&F basically sold Getty last fall.  They could not find a buyer or pull off an IPO so "Hellman & Friedman is paying itself $500 million after borrowing $1.3 billion for portfolio company Getty Images."
http://blogs.reuters.com/columns/2010/11/03/short-memories-finance-private-equity-payouts-2/]

Credit to jsnover for posting this originally.
http://www.microstockgroup.com/general-stock-discussion/photos-from-gettyimages-direct-to-thinkstock-ouch/msg194494/#msg194494

So if I'm reading this correctly, H&F borrowed $1.3 billion backed by Getty's assets, which would show up on the Getty balance sheet making it too ugly to pull off an IPO or sell.  

Now Getty needs as much cash flow as it can get to pay off the bonds, so it decides we are unsustainable.  Getty's income before interest has to be way less then $1.3 billion per year, so they will really struggle for a number of years to pay this off.  If they can't, the bond holders take the company, but H&F keeps the $500 million


     Wow. I didn't see that. Great info! It's the greater fool theory as applied to the bond market. These are ,of course , the same geniuses that packaged subprime loans into triple A bonds a few years ago. It's hard to believe that someone would buy these bonds, even at more than 400 basis points over libor. Now, instead of just keeping the original buyers happy, they have to service the debt. The one good aspect of this is that bond buyers are very quick to liquidate a company and get what they can when things go bad. Istock without the Getty baggage might be the most valuable asset, and would then not be called upon the keep the dead heap of Getty alive. Hard to believe this was the best option for H&F. After all, they paid over 2 billion for Getty, and are only able to pull out $500 million. Things must be worse than they appear.

« Reply #43 on: April 11, 2011, 06:13 »
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Yeah, it is the same tool that takes out a large number of swear and vulgar words.

IS doesn't work because it is also used for the word is... like, "is that a cat", I suppose the work around would be making it case sensitive, but I haven't bothered yet.
ISP also stands for Internet Service Provider which is used here from time to time.


 

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