HOG pump & dump
Wow...Harley-Davidson is on a tear today! Folks must be excited about the prospects of a stabilizing economy, improving job numbers and rising consumer confidence....oh, wait.....
Nope, just another bogus rumor swirling around about a buyout.
This happens every so often with HOG. Two years ago, the rumor was that Honda was proffering a deal to buy up the iconic bike maker. This time it's Kohlberg Kravis Roberts.
Harley-Davidson has had a difficult few years, and has some work left to do in front of them. But, please, this is a solid, stable company with a decent cash reserve. Folks can talk about declining sales, aging boomers and hyper-sport bikes all they want. HOG is not in a vulnerable position. Quite the opposite. The downturn has forced the company to get lean. CEO Keith Wandell took the reins about a year ago and has made the tough choices to shut down the unprofitable Buell subsidiary, undo the mistake of purchasing MV Agusta, shutter factories and re-organize the York assembly plant. The company reduced its workforce and product complexity. This is a company that is now poised for growth in a 3 year timeframe. There is no advantage to HOG stockholders or to the company to consider a leveraged buyout. Nor do I see value for a private equity firm to buy-up a controlling share of the company.
No, what we are seeing here is a form of pump & dump. Rumor mongering to drive up the stock price for the day. Reprehesible.