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Acushnet IPO off to an underwhelming start

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Acushnet (GOLF), the umbrella company for Titliest, opened on the New York Stock Exchange on Friday at $17 per share, below the originally expected price range of $21-24.

On Friday, GOLF hovered between $16.90 and $18, ultimately closing at $17.95 on the day. The IPO was for 19.3 million shares, raising $329 million for Acushnet’s existing investors.

CNN Money compared the stock’s small percentage gains to, very fittingly, the sport of golf: “It’s like finally hitting a shot onto the green — after you’ve already plunked your ball in a water hazard a few times.”

The Boston Globe piled on, saying Acushnet “made a bogey in its debut.”

After a proverbial bogey on the first hole, Acushnet’s leadership is looking toward the future; the next 17 holes, if you will.

“I don’t get caught up in the day to day,” Acushnet CEO Wally Uihlein told the Boston Globe. “I’m looking long-term. Over time, we have a very strong track record of delivering the kind of financial results that we think make an attractive investment opportunity.”

Acushnet is owned by Fila Korea Ltd., which purchased the company from Fortune Brands in 2011. Acushnet registered $1.5 billion in sales during a 12-month period ending this past June.

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9 Comments

9 Comments

  1. JustTrying2BAwesome

    Oct 31, 2016 at 6:39 pm

    I’m buying 1 share. Karma to the golf gods praying I can make a hole in one someday. Someday…

  2. King of Carlsbad

    Oct 31, 2016 at 12:12 pm

    Acushnet does not sell a lot of golf clubs now (380 million/yr) and is unlikely to sell a lot more in the future, so it will be interesting if the Pro V1 and FJ shoes can keep this stock afloat.

  3. Large chris

    Oct 31, 2016 at 10:39 am

    I lolled at Wally Uilein reckoning he’s not caught up in the day to day. Hahahahaha he’s obviously not had to do many investor conference calls. They’ll want his numbers am and pm.
    Corporate investors won’t put up with that, I give him 3 months tops.

  4. Nolanski

    Oct 31, 2016 at 7:12 am

    Inflation is very low right now

    • Steve S

      Nov 1, 2016 at 8:42 am

      Bubba, 20%!!?? Really? Where do you live? Since I track such things with my financial programs my personal findings (in the mid west over last year) are as follows:

      1. Food we buy from the supermarket is almost even from last year (up .1%)
      2. Housing costs up about 4% (utilities, taxes, mortgage didn’t change)
      3. Gasoline for car down 15%
      4. Healthcare up about 4% (insurance premiums)

      Buying a house would be up because prices were in the toilet for so long; they would naturally be up after hitting 15 year lows.

  5. John M.P. thirty-three

    Oct 29, 2016 at 1:04 pm

    If the asset was a cash cow why would Fila shed it?
    …rough times ahead for shareholder s.

  6. Philip

    Oct 29, 2016 at 11:47 am

    Not failing at the moment, but now that they have shareholders on board the fall will slowly begin. Shareholders do not care one bit (the bigger ones at least) about the company – they care about their investment “share price” and want it to grow. In a flatlined industry with no star stepping up for likely quite a while they have two options to grow share price – increase price and decrease quality … I suspect prices are near the max now for what the larger public can afford so reducing quality will likely be next – let the tumble begin.

  7. J.R.

    Oct 29, 2016 at 10:05 am

    why would one invest in a failing company–or one that is at best on it’s way downhill instead of uphill!!

    • Steve S

      Nov 1, 2016 at 8:44 am

      Good question, J.R. If there were something available to buy that would allow you to “long term”(1 year or more) short this stock I’d buy a bunch of shorts. It’ll be $10-12 range in a year.

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On Spec

On Spec: A deep dive into iron specs and “loft jacking”

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With so many new iron releases being announced, host Ryan Barath gets deep into the world of iron design and specs—most specifically loft.

The topic also revolves around trying to fit an iron-based on handicap and why that is a flawed model.

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Opinion & Analysis

The death of the 3-iron and what it means for your bag setup

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The 3-iron is almost extinct. It sounds like an odd statement, but it’s very true. Don’t believe me? Go try and buy one in a set. They are not easily found.

As we evaluate this topic, I’ll refrain from specs from “players” clubs as these are not the irons normally purchased. Yeah, it might skew the data, but even the players capable of playing the long irons are opting out of the 3 iron. And let’s be honest, should any of us be playing a blade 3-iron?

Mizuno only offers 4-PW in the JPX line now. Titleist only offers a 3-iron in T100s, while the rest are void of 3-irons. TaylorMade provides 4-PW in the P790, P790Ti, and P770. Callaway has done the same, only offering a 3-iron in the “players line” of clubs, while the rest is again void of the-iron. Cobra golf has also followed suit.

So are 3-irons just too hard to hit? Is that why no one is buying them, thus causing the OEMs to stop making them? The only ones left to buy are the “players” 3 irons, and those aren’t even reasonable unless you’re a professional.

What if I told you we were being deceived? What if I told you the 3-iron is still very much alive in all the iron sets available but under the guise of a different number?

Let’s hop into the “wayback machine” and take a quick look at the history of iron lofts.

The year is 1970, and the vast majority of irons available are blades. You know, the razor-sharp leading edges that are ready to break your wrist with a deep divot.

The image above is an actual snippet from a catalog from the ’70s. At this point, the 1-iron was virtually extinct, and in 1975, Lee Trevino was immortalized by his joke about how God couldn’t hit a 1-iron, which typically fell in the 18-degree range at the time. 2-irons were standard issue in the set, and the lowest loft you might find is 20 degrees.

Then the ’80s came, and things started to progress. As you might expect, lofts started to decrease. It wasn’t because of flight windows, or launch numbers, because they didn’t have that kind of technology readily available to measure those attributes. It was simply a quest for distance.

Then in the ’90s, you’d pretty much see all iron sets with 21-degree 3-irons, down to 48-degree PW’s, and 21 degrees being the norm for the lowest lofted 3-iron. 2-irons at this time were typically 18 degrees and available by request only.

Then came the 2000’s, an era we all should be familiar with. This is where things started to get interesting. Not only because lofts continued to be strengthened, but because the hybrid became a new option to replace the long irons. Adams Golf made a killing as it perfected this golf club, creating the Idea line that was in the bags of most of the senior tour players and many of the PGA Tour players. These were a fan favorite at retail too. The hybrid was an easy long iron to hit and quickly started to replace 3-irons in golf bags across the country and even on tour.

By this time the pitching wedge lofts started to get pushed to 46 degrees, which was a big jump, to be honest. In the 1970s, MacGregor was making pitching wedges with 49 degrees of loft. So, for the 90’s to be around 48 degrees, it wasn’t too much of a shock. But in the 2000s, we now saw PW’s drop to 46 degrees; a half club stronger. This is where the downfall began, in my opinion.

The first decade of the 21st century needed the gap wedge, also known as the approach wedge or utility wedge or just plain old “wedge.” Now, keep in mind, this club wasn’t anything new. The gap wedge existed ever since the beginning because at 50-52 degrees it was simply a pitching wedge from the ’70s. But it became a necessary element for the bag since the lofts of every iron were starting to move farther and farther away from the sand wedge.

Now in 2020, the average loft of the PW is 43.5 degrees, and the average 4-iron loft is 20.6 degrees. Turns out, the 4-iron from 2020 is .3 degrees stronger than the average 2-iron (20.9 degrees) from 1970. We have come full circle! Instead of maintaining those classic numbers, of 2, 3, 4, 5, 6, 7, 8, 9, PW, the new sets are labeled 4, 5, 6, 7, 8, 9, P, G.

I wonder how many golfers out there carry a 4-iron thinking it’s a club they can hit? Probably too many! Obviously, the 3-iron is dead at this point, since it would actually carry the loft of the elusive 1-iron Trevino claimed was unhittable!

Now, it’s time to discuss how we got to this point. You’ll hear a lot of companies talk about “flight windows” or “launch angles” and how it was changed by engineering, lowering CG’s, and increasing speed through thin faces. Some will talk about how the ball has changed, and it just launches higher, and it requires the lofts to be strengthened, or it will just go too high!

I hate to be the bearer of bad news, but that is all a bunch of baloney, and here is why: They started making gap wedges as part of the set. If the launch was too high or the window was too different, why make a matching gap wedge with the same technology and have the loft of a pitching wedge from the 1990s? Wouldn’t that launch or window then be too high for that club too? And yet you still need to buy another gap wedge to fit the 52-degree range. If the average golfer bought a 2020 game improvement set today, they would find the set make up to be 5, 6, 7, 8, 9, PW (43.5 degrees), Gap #1 (48.6 degrees), Gap #2 (52 degrees). That means if you happen to carry a 56 and a 60 degree, you now have the same amount of label wedges (5) as you do irons (5)!

Five wedges in the bag! Does anyone think this is weird?

Furthermore, when was a higher launching iron shot a bad thing? Wouldn’t average golfers benefit from a steeper angle of descent so the golf ball stops quicker on the green?

I conducted a study where I tested a Titleist 716 MB 8-iron with 39 degrees of loft to a TaylorMade P790 9-iron with 40 degrees of loft. All the data was captured on the Foresight GC2 launch monitor. It wasn’t a perfect test since they didn’t have the same shaft or loft, but my findings were surprising none the less. They went the same distance, almost down to the decimal. The Titleist went 165.2 yards, and the TaylorMade went 165.1 yards. Launch was only .6 degrees different while peak height was less than four feet different. So, unless you are Tiger Woods, you are not noticing a difference out on the golf course.

Some of you might think, “so, the label on the bottom of the club changed, it’s all going the same distance. So, what’s the big deal?” To me, it’s the confusion it creates more than anything. By decreasing the lofts, you’re just making the numbered iron go farther, and you are creating even bigger problems by having large gaps with the sand wedge when all amateurs need those clubs. It’s also putting clubs into the hands of golfers when they have no business hitting, like the 4-iron with 20 degrees of loft. Titleist has already made a T400 5-iron with 20 degrees of loft, and that’s just silly.

There also is the argument that golfers love distance, and when they start playing and can hit a 7-iron relatively far, it helps grow the game. Growing the game isn’t a bad thing, but if they are new to the game, they shouldn’t have any preconceived notions of how far to hit a 7-iron, and that means loft at that point becomes irrelevant.

I will not refute that a 40-degree lofted game improvement iron will be slightly longer than an identical lofted players club, but I think you’d be surprised to see the actual difference is a maximum of about three yards longer. The technology works, but by no means is it so substantial that we need to change the label on the bottom of the golf club.

The bottom line is that loft is king, regardless of the technology involved, and I have seen, but one equipment company make a change backwards! This is TaylorMade with their P770 irons. In comparison the P790, they increased the loft by one degree in the short irons and up to two degrees in the long irons, to add height and spin to the irons to improve performance. Imagine that, more spin and height are an advantage! And that was backed by their testing and their data.

Now to even further nail down my point, it is worth noting that TaylorMade Golf offers the highest lofted Pitching Wedge in the industry at 49 degree, which are in the Tiger lofts of the P7TW irons. That same iron set has a 22.5-degree 3-iron. At 22.5 degrees, it is typically the lowest-lofted iron in the golf bag of the best iron player on the PGA Tour in 2019. Of course, he has the skill to play an iron with lower loft, but the point that history reveals to us is that the effective loft of playability for an iron is about 22 degrees and higher. Anything lower lofted than that is typically replaced with a hybrid. This is not just a trend for the amateur golfer either, and it is even happening on tour with the best players in the world.

We will probably never see the lofts rolled back, but the least we can do is update Lee Trevino’s quote, “if you ever find yourself in a thunderstorm, lift up your 4-iron, because not even God can hit a 4-iron.”

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The Gear Dive: Going scorched earth on Tiger documentary

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On this episode of TGD, Johnny goes in hard on the HBO documentary Tiger.

 

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