Subject:
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Re: LEGO® is near an agreement to sell its LEGOLAND theme parks
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Newsgroups:
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lugnet.mediawatch, lugnet.legoland
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Date:
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Wed, 1 Jun 2005 16:04:25 GMT
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Viewed:
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9546 times
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In lugnet.mediawatch, Marc Nelson Jr. wrote:
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In lugnet.mediawatch, Thomas Main wrote:
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In lugnet.mediawatch, Larry Pieniazek wrote:
snip
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Jake said the key word is “speculated”... to me, the key word is “head
scratcher” (well that’s two words)!
I still don’t see why LEGO want to do this, the amount of money they get
back seems a pittance and it loses significant brand equity control... IMHO
anyway.
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As long as we are in a speculative mood...why does TLG want to raise money.
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Last year 2004, LEGO had a net loss of about $335 million
That might have something to do with it.
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Faced with a loss, tactical managers keep doing what they were doing but sell
off valuable/strategic assets (or lay off key people) in order to raise cash to
keep afloat a while longer and avoid the day of reckoning.
Faced with a loss, strategic managers change what they were doing but sell off
underperforming assets (or lay off underperforming people) in order to fund
transformation.
The truth is usually somewhere in between, of course... So which is it here? We
have seen a lot of signs that LEGO, in response to the lossmaking, is changing
what they are doing and some that they are not.
Are the parks strategic assets or underperforming ones? The analyst cited thinks
strategic, thinks they are a vital part of brand management. He could be wrong.
If they’re non strategic, underperforming or even lossmaking (beyond their
strategic value if any to support the brand, which should be factored in when
counting up losses, assuming you can quantify it), this is a shrewd move. If
they’re strategic, it’s not at all shrewd.
This is all second guessing, of course, we have no info to really judge on. But
neither did that analyst, presumably, and he’s thinking not. Of course, if you
ask 10 analysts, you’ll get 11 opinions.
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