Klarinet Archive - Posting 000015.txt from 2006/12

From: GrabnerWG@-----.com
Subj: Re: [kl] WWBW Bankruptcy -- to set the record straight
Date: Fri, 01 Dec 2006 19:01:48 -0500

In a message dated 12/1/2006 5:25:05 P.M. Central Standard Time,
charette@-----.org writes:
<<the Zapf's were displeased on how things worked out (exactly what happened
we don't know), sued WW&BW, won a $9m judgement, and that put WW&BW under.>>

You don't win a $9 million dollar judgement just because someone is
displeased. I'm sure there was some stipulation in the purchase agreement that was
later not observed. I would guess that payments toward the purchase price were
missed.

In the heady dot.com era many companies made purchases and investments that
later proved to me monumentally unwise. Witness the Merger of AOL and
Time_Warner! See how well that worked out

I have some relevant experience in this arena:

My last job in the "corporate world" was with PSINET, one of the original
backbones or the commercial Internet.

To quote Wikipedia: "Despite its rapid growth and significant position in
the commercial Internet services market, the company was never profitable. It
was a popular stock with analysts during most of the dot-com boom because of
its rapid revenue growth and aggressive expansion plans, but by 2000, PSINet
was beginning to struggle. The company lost more than $5 billion in 2000
despite having close to doubled annual revenues to $995 million."

Got that? They had revenue (sales) of $995 million dollars and went rapidly
bankrupt - losing $5 billion!

Why? They went around buying up small and intermediate size companies with
an Internet presence, trying to corner the market. They bought many companies
that were nearly worthless or almost bankrupt. It finally collapsed like a
house of cards.

It sounds to me like WW&BW could never digest, or profit from its purchase
of Music123, and even though they had brisk sales, they ultimately lost too
much money and were not able to stay in business.

Nothing evil, no conspiracy, perhaps just an investment gone bad.

Walter Grabner
www.clarinetxpress.com
New Buffet Clarinets
World Class Mouthpieces

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