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Meade Instruments Corp. (MEAD) Message Board

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  • sidewinder587 sidewinder587 Jun 2, 2009 10:41 AM Flag

    I AGREE, MEADETHROAT, BOARD MEMBERS FRED AND TIM MUST GO

    You seem like a very intelligent person with the inner knowledge of corperate management.

    I enjoy reading all of your threads about the meade management or the lack thereof.

    anyhow, let me throw this one out there. Lets say that you are the personal advisor to the new CEO, what would you advise him to do to turn meade around?

    Please take my above question seriously and write a full report detailing what you think the new CEO should do to turn mead around to the old mead of the early and late 90s that we used to be proud of.

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    • The sale of Meade Europe to a chinese manufacturer, to the former owner and to the Managing Director of Meade Europe has raised many questions, and I would like to add some more questions from my point of view:

      1.
      The operation of the sale resulted in a cash transfer of USD 12.400.000. Where is this money now and for which purposes is it used for ?

      2.
      It is clear that the chinese competitor of Meade, Mr. David Shen of Synta Technology Corporation would have paid much more for Meade Europe and was interested to take the complete company. Why was he closed out by Baird Investments ? Who was the real agent for this transaction ?

      3.
      Meade Instruments sold Redfield, Simmons and Weaver as well as Bresser and Meade Europe for over USD 20M in cash. The stock value is not representing this amount in any aspect, in fact, the whole companies value is about 4,5M USD at the moment.
      Who can explain the húge difference of USD 15,0 M USD in this calculation ?

      Syntatech

    • Dear Sidewinder,

      It is beyond the scope of simple postings on this board to postulate fully, as you request, on the righting of Meade. It would take at the very least several weeks, possibly a month of full time effort to fully flesh this out. To provide a meaningful, detailed report of the kind you are asking, it would be a necessity to have access to the company's complete financial records, inventory status, sales and profitability by account, sales and profitability by category and SKU as well as specific details on their overhead/expense structure. It also appears you ask me to do this without getting paid.

      Unfortunately, the 90's are gone. The bridges are washed out and it is impossible to find the same path back to circumstances that made the company successful in the 90's. The landscape has radically changed and continues to change and not necessarily for the better. The retail base that helped build Meade has dramatically been altered with at least 1000 storefront locations closing. The core astronomy market by industry statistics is aging rapidly and not being adequately replaced with younger hobbyists. The core market is responsible for the vast majority of the company's proprietary high-end sales.

      If you look at the corporate landscape over the last 15-years, there has been massive consolidation in many, if not most industries: retail, banking, manufacturing, transportation, you name it. It is clear this has happened because for those industries to be healthy they needed to operate with greater efficiency. Such is the nature of globalization and the free market system rewarding those who produce more efficiently. Meade and Celestron have been prohibited by the US government from merging at least three times, even though it could be shown both company's were losing money at some of those times.

      While some will differ strongly with what I say, nonetheless, with a shrinking customer base and lack of a generally recognized, financable game plan (industry wide) to significantly grow the hobbyist market, there are but two truly viable alternatives:

      1) Meade merges, or sells, to a strategic player in the telescope industry. The players with resources are almost all Chinese. That is a fact.

      2) Meade goes private and trys to surrive in its weakened condition against Chinese producers whose quality level has risen dramatically to that approaching the consistant reputation for quality products formerly only attributable to the Japanese or Germans in previous years.

      Even as a private company, profitability is the other fly in this ointment, the intense competition for a shrinking consumer market continually drives profits thin for manufacturers as the industry titans claw over what is left of the shrinking water hole in a Serengeti with no rain in sight.

      Add to this the effect of retailers importing directly and offering their own house brands, and Chinese producers selling direct, and you begin to see even more acceleration in a shrinking market share for Meade.

      Conclusion:
      I predict consolidation will take place, and should take place for the health of the industry. The alternative is a possibly protracted demise of certain players until they die by the water hole exhausted and emaciated. This last protracted scenario will also result in a greatly weakened industry as a whole.

 
MEAD
4.52+0.0400(+0.89%)Sep 11 3:57 PMEDT

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