Pentax EVIL is comming!!!

glanglois · 08-03-2010, 02:54 PM

Originally posted by emr

Have to admit that this "exit strategy for the Pentax camera operations" part does not feel good. Then again, I have zero understanding of business and perhaps it's just normal situation analysis.

Citi think that Hoya wants Pentax out. Exiting the business. Selling it to someone else.

Please note that Citi do not see this as "if" but "when". The risk is sooner versus later. Sooner is good for Hoya. Later is not so good. No reference to a risk that Hoya will not find a buyer.

The financial projections continue to show Pentax as part of Hoya for a few years but that would be a pro forma item. Gotta show it, even if they're convinced Hoya has Pentax on the block. Or has a buyer but is still working through negotiations.

Now .... time for the inevitable thread about a prospective purchaser.

Who's up for that?

nosnoop · 08-03-2010, 02:59 PM

I really wished Pentax would have jumped in earlier. Because even if they announce their intention, it could take at least a year before we see any products on the shelf. The best timing would be before Canon and Nikon joining in - and with Nikon's system imminent, the window of opportunity is closing.

ilya80 · 08-03-2010, 02:59 PM

Originally posted by stanleyk

Whatever Pentax does (and hopefully they will release a FF camera to please a lot of forum members)

stanleyk for Hoya president

pxpaulx · 08-03-2010, 03:07 PM

Originally posted by Q Bahorel

Could you please explain "Pentax as a risk still ongoing?" Do you mean that Hoya's deal to buy Pentax is still in progress?

edit: the Q1 profit margin on Pentax was 4.1%

For people who don't feel like grabbing the pdf, here's the relevant portion (pg 4):

I would actually interpret that as follows: Hoya did consider Pentax a risk, but with the profit margin and folding the name/brand into their accounting spreadsheet, this statement appears to indicate they have moved on from considering the camera side to the brand a risk to considering it profitable. In other words, they have now made their decision, and that the favorable decision has been made not to sell.

uccemebug · 08-03-2010, 03:28 PM

Originally posted by emr

I find it VERY hard to believe that something like Citigroup would publish market and company analysis based on some vague rumors. No way.

I'll probably regret saying this, but I used to work at that investment bank.

It's utterly impossible that they would publish something factually wrong, that's not how they make their money. Which is not to say that you know why they publish this sort of report, an IBD report is almost never what it appears to be on the face of it (remember the Sparx publications that wound up with Pentax being sold to Hoya?).

glanglois · 08-03-2010, 03:32 PM

Originally posted by pxpaulx

I would actually interpret that as follows: Hoya did consider Pentax a risk, but with the profit margin and folding the name/brand into their accounting spreadsheet, this statement appears to indicate they have moved on from considering the camera side to the brand a risk to considering it profitable. In other words, they have now made their decision, and that the favorable decision has been made not to sell.

It reads to me as if Citi are noting the risks to their assessment of Hoya, not of risks to Hoya itself. An upside risk is Hoya's selling Pentax and exiting the business quickly. A downside risk to their analysis is that the process may take longer. There is no mention of a risk of that not happening at all.

Hoya may well divest themselves of the Pentax camera operations even if profitable. It's often easier to sell a profitable operation than a losing operation. If Pentax is profitable now, it's the right time to sell if there is no reason to keep it.

If we look at the numbers again, we see that Pentax (as opposed to Healthcare) has large sales, usually implying a lot of effort to manage the revenue stream. But we look further and find that Pentax is providing a very small share of operating profit.

I look at that and see a division that's a distraction to Hoya. Hoya's management need to aim for margins and profit. That's just what the analysis reports about Hoya's history and corporate goals.

A big consumer unit that has small market share and small margins just does not fit the Hoya model in any way. A distraction. To be flogged around the M&A market with great diligence. And urgency.

Did I miss something?

**Aristophanes** · 08-03-2010, 03:37 PM

Originally posted by pxpaulx

I would actually interpret that as follows: Hoya did consider Pentax a risk, but with the profit margin and folding the name/brand into their accounting spreadsheet, this statement appears to indicate they have moved on from considering the camera side to the brand a risk to considering it profitable. In other words, they have now made their decision, and that the favorable decision has been made not to sell.

I do not think they would have released the 645D without that assertion. The 645D is the type of product that makes the brand unsellable, at least in the short term. Also, who would buy? This may go back to the Samsung rumour mill, which is now very distant.

**Aristophanes** · 08-03-2010, 03:39 PM

Originally posted by Pablom

So how does Citi know all these things that no one else does? or do they?

Citi is a preferred shareholder and creditor. They loan Hoya $$$, probably as part of the Yen carry trade, and partly as investment loans.

glanglois · 08-03-2010, 03:56 PM

Re: an unsellable brand. You see the 645D as a kind of poison pill??

pxpaulx · 08-03-2010, 03:57 PM

Originally posted by Aristophanes

I do not think they would have released the 645D without that assertion. The 645D is the type of product that makes the brand unsellable, at least in the short term. Also, who would buy? This may go back to the Samsung rumour mill, which is now very distant.

I totally agree. The K-7, the K-x and 645d, heck even the optio w90 show they the company sees a future in the brand. Even they are a small niche brand, when they do well and release news-worthy product, it points to Hoya as a whole company and keeps that name in the back of people's minds. For a company that is otherwise not necessarily a big public name, I can't help but think they appreciate that kind of attention, even if the actual market share is relatively small. As long as the division makes money, basically, what would be the incentive not to keep it going?

jct us101 · 08-03-2010, 04:38 PM

The rating on this thread makes me laugh a little bit. Ok well maybe smile.

The point from the thread is that Citi thinks that Pentax is planning some kind of mirrorless camera, isn't that all that we have at the moment? Remember those patents for the Pentax Micro Four Thirds lenses? Could those have a connection to this?

**barondla** · 08-03-2010, 06:03 PM

I like the previous idea of a slightly bigger than a Pen camera using the 645 sensor. This would allow putting K lens on with adapter for FF. It would also allow the sensor manufacturer to sell many more sensors and reduce cost. Canikon would be in a world of bother then.

Had a Fuji 645 folder that I dearly loved. Wasn't much bigger than a pen.
thanks
barondla

kxr4trids · 08-03-2010, 06:42 PM

Well I guess it's unofficially official, then.

arpaagent · 08-03-2010, 07:51 PM

hopefully this is the sign of the ultimate hiking/trekking camera. Lightweight, compact, weather sealed. I'm not sure how I feel about electronic viewfinders though. I suppose I could forego the pleasure of an OVF for a weekend of hiking, maybe. I'd love the best of both worlds...maybe pentax can surprise us with something great! Fingers crossed.

Finger · 08-03-2010, 09:04 PM

There is another possibility, Hoya sells Pentax, and then offers an Hoya EVIL camera...

08-03-2010, 02:54 PM	#31
glanglois Veteran Member Join Date: Aug 2007 Location: Madison, Wis., USA Posts: 1,506	It's clear enough Originally posted by emr Have to admit that this "exit strategy for the Pentax camera operations" part does not feel good. Then again, I have zero understanding of business and perhaps it's just normal situation analysis. Citi think that Hoya wants Pentax out. Exiting the business. Selling it to someone else. Please note that Citi do not see this as "if" but "when". The risk is sooner versus later. Sooner is good for Hoya. Later is not so good. No reference to a risk that Hoya will not find a buyer. The financial projections continue to show Pentax as part of Hoya for a few years but that would be a pro forma item. Gotta show it, even if they're convinced Hoya has Pentax on the block. Or has a buyer but is still working through negotiations. Now .... time for the inevitable thread about a prospective purchaser. Who's up for that?

08-03-2010, 03:32 PM	#36
glanglois Veteran Member Join Date: Aug 2007 Location: Madison, Wis., USA Posts: 1,506	Which Risk? Originally posted by pxpaulx I would actually interpret that as follows: Hoya did consider Pentax a risk, but with the profit margin and folding the name/brand into their accounting spreadsheet, this statement appears to indicate they have moved on from considering the camera side to the brand a risk to considering it profitable. In other words, they have now made their decision, and that the favorable decision has been made not to sell. It reads to me as if Citi are noting the risks to their assessment of Hoya, not of risks to Hoya itself. An upside risk is Hoya's selling Pentax and exiting the business quickly. A downside risk to their analysis is that the process may take longer. There is no mention of a risk of that not happening at all. Hoya may well divest themselves of the Pentax camera operations even if profitable. It's often easier to sell a profitable operation than a losing operation. If Pentax is profitable now, it's the right time to sell if there is no reason to keep it. If we look at the numbers again, we see that Pentax (as opposed to Healthcare) has large sales, usually implying a lot of effort to manage the revenue stream. But we look further and find that Pentax is providing a very small share of operating profit. I look at that and see a division that's a distraction to Hoya. Hoya's management need to aim for margins and profit. That's just what the analysis reports about Hoya's history and corporate goals. A big consumer unit that has small market share and small margins just does not fit the Hoya model in any way. A distraction. To be flogged around the M&A market with great diligence. And urgency. Did I miss something?

08-03-2010, 06:42 PM	#43
kxr4trids Senior Member Join Date: Mar 2010 Location: VA Photos: Albums Posts: 227	Well I guess it's unofficially official, then. Attached Images

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08-03-2010, 02:59 PM	#32
nosnoop Veteran Member Join Date: Feb 2007 Posts: 1,299	I really wished Pentax would have jumped in earlier. Because even if they announce their intention, it could take at least a year before we see any products on the shelf. The best timing would be before Canon and Nikon joining in - and with Nikon's system imminent, the window of opportunity is closing.

08-03-2010, 02:59 PM	#33
ilya80 Veteran Member Join Date: Oct 2008 Location: Saint-Petersburg, Russia Photos: Albums Posts: 410	Originally posted by stanleyk Whatever Pentax does (and hopefully they will release a FF camera to please a lot of forum members) stanleyk for Hoya president

08-03-2010, 03:07 PM	#34
pxpaulx Veteran Member Join Date: May 2009 Location: Twin Cities, MN Posts: 2,867	Originally posted by Q Bahorel Could you please explain "Pentax as a risk still ongoing?" Do you mean that Hoya's deal to buy Pentax is still in progress? edit: the Q1 profit margin on Pentax was 4.1% For people who don't feel like grabbing the pdf, here's the relevant portion (pg 4): I would actually interpret that as follows: Hoya did consider Pentax a risk, but with the profit margin and folding the name/brand into their accounting spreadsheet, this statement appears to indicate they have moved on from considering the camera side to the brand a risk to considering it profitable. In other words, they have now made their decision, and that the favorable decision has been made not to sell.

08-03-2010, 03:28 PM	#35
uccemebug Veteran Member Join Date: Sep 2006 Location: Tokyo Photos: Gallery \| Albums Posts: 962	Originally posted by emr I find it VERY hard to believe that something like Citigroup would publish market and company analysis based on some vague rumors. No way. I'll probably regret saying this, but I used to work at that investment bank. It's utterly impossible that they would publish something factually wrong, that's not how they make their money. Which is not to say that you know why they publish this sort of report, an IBD report is almost never what it appears to be on the face of it (remember the Sparx publications that wound up with Pentax being sold to Hoya?).

08-03-2010, 03:37 PM	#37
Aristophanes Site Supporter Join Date: Jul 2008 Location: Rankin Inlet, Nunavut Photos: Albums Posts: 3,948	Originally posted by pxpaulx I would actually interpret that as follows: Hoya did consider Pentax a risk, but with the profit margin and folding the name/brand into their accounting spreadsheet, this statement appears to indicate they have moved on from considering the camera side to the brand a risk to considering it profitable. In other words, they have now made their decision, and that the favorable decision has been made not to sell. I do not think they would have released the 645D without that assertion. The 645D is the type of product that makes the brand unsellable, at least in the short term. Also, who would buy? This may go back to the Samsung rumour mill, which is now very distant.

08-03-2010, 03:39 PM	#38
Aristophanes Site Supporter Join Date: Jul 2008 Location: Rankin Inlet, Nunavut Photos: Albums Posts: 3,948	Originally posted by Pablom So how does Citi know all these things that no one else does? or do they? Citi is a preferred shareholder and creditor. They loan Hoya $$$, probably as part of the Yen carry trade, and partly as investment loans.

08-03-2010, 03:56 PM	#39
glanglois Veteran Member Join Date: Aug 2007 Location: Madison, Wis., USA Posts: 1,506	Re: an unsellable brand. You see the 645D as a kind of poison pill??

08-03-2010, 03:57 PM	#40
pxpaulx Veteran Member Join Date: May 2009 Location: Twin Cities, MN Posts: 2,867	Originally posted by Aristophanes I do not think they would have released the 645D without that assertion. The 645D is the type of product that makes the brand unsellable, at least in the short term. Also, who would buy? This may go back to the Samsung rumour mill, which is now very distant. I totally agree. The K-7, the K-x and 645d, heck even the optio w90 show they the company sees a future in the brand. Even they are a small niche brand, when they do well and release news-worthy product, it points to Hoya as a whole company and keeps that name in the back of people's minds. For a company that is otherwise not necessarily a big public name, I can't help but think they appreciate that kind of attention, even if the actual market share is relatively small. As long as the division makes money, basically, what would be the incentive not to keep it going?

08-03-2010, 04:38 PM	#41
jct us101 Veteran Member Join Date: Jun 2008 Location: Rohnert Park, CA Posts: 3,793	The rating on this thread makes me laugh a little bit. Ok well maybe smile. The point from the thread is that Citi thinks that Pentax is planning some kind of mirrorless camera, isn't that all that we have at the moment? Remember those patents for the Pentax Micro Four Thirds lenses? Could those have a connection to this?

08-03-2010, 06:03 PM	#42
barondla Site Supporter Join Date: Sep 2006 Location: midwest, United States Photos: Gallery \| Albums Posts: 5,714	I like the previous idea of a slightly bigger than a Pen camera using the 645 sensor. This would allow putting K lens on with adapter for FF. It would also allow the sensor manufacturer to sell many more sensors and reduce cost. Canikon would be in a world of bother then. Had a Fuji 645 folder that I dearly loved. Wasn't much bigger than a pen. thanks barondla

08-03-2010, 07:51 PM	#44
arpaagent Veteran Member Join Date: Sep 2008 Location: Raleigh, NC Photos: Gallery Posts: 803	hopefully this is the sign of the ultimate hiking/trekking camera. Lightweight, compact, weather sealed. I'm not sure how I feel about electronic viewfinders though. I suppose I could forego the pleasure of an OVF for a weekend of hiking, maybe. I'd love the best of both worlds...maybe pentax can surprise us with something great! Fingers crossed.

08-03-2010, 09:04 PM	#45
Finger Senior Member Join Date: Mar 2008 Location: Québec Posts: 121	There is another possibility, Hoya sells Pentax, and then offers an Hoya EVIL camera...