S&P downgrades once again Bain/Guitar Center LBO

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Thursday June 13, 2013 · 1:35 PM PDT

2013/06/13 · 13:35

Guitar Centers one and only thing holding them up is Liquidity. Guess what it's deteriorating.
S&P downgrades Guitar Center 1st Quarter this year just like they did 1st Quarter of last year. Last year when they were downgraded they were also warned that if the new stores don't perform they should expect another downgrade this year. Well guess what, the new stores didn't perform and same store sales dropped 2.5% hence the additional downgrade. The online component of Guitar Center dropped 8%. Last year they blamed that on moving their headquarters to California. Wonder what they will blame that on this year??
All this is due to the massive debt that they incurred when Bain Capital committed the dreaded Leveraged Buyout in 2007, that the business community seems seems to find totally acceptable. And with Matt Taibbi's assessment it is considered Highway Robbery. This may be the death knell for Guitar Center as they have to have every metric land perfectly in place to handle this debt.
Based on the last 10K and 10Q its not happening......

Bain Capital Harvesting Guitar Center

stratdan

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Monday November 26, 2012 · 2:02 PM PST

2012/11/26 · 14:02

Latest Guitar Center Q3 Results show that the debt Bain Capital piled on when they took this company over is on the verge of causing it to FOLD UP LIKE A LAWNCHAIR!!!
You will see cash on hand drop down terribly from 106Mil a year ago to only 9.9Mil the only place you see any revenue increase is from new stores. All same store sales growth dropped. The total loss YTD has increased from 64Mil last year to now 70Mil this year. That basically means they are incurring net losses of about 8Mil per month.
Moody's and S&P have them now rated as JUNK. And the CEO Greg Trojan just resigned. He originally worked at Bain Capital.
With little cash on hand and with debt of 1.42Bil Moody's claims this debt is unsustainable. They also have a DEBT PAYMENT of 135Mil due in first Quarter of 2013. Nobody can see how this can be paid. But with Big Money at the helm they will rigg the system some how just like the hedge fund did with Hostess.
This rigging the system by large private equity and hedge funds is what Elizabeth Warren is talking about when she says she wants to eliminate rigging of the system.
The Results Below The Squiggle:

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