Olympus status - should we be worried?

[Indian Valley Scuba]

So much to ponder, eh? Olympus.....or not!

 

[Ardy]

Well having sold off most of my Nikon lenses and camera's 3 years ago to buy a full Olympus UW DSLR system....... then within a year there would be no more mid sized DSLR's and now this. If the system lasts the next 5 years I will have been a very happy user, if not I will squeal like a pig.

I read something by the MD a while ago and thought he sounded very dodgy - fish rot from the head.

Sony here I come!!!

 

[slowhands]

I'm in the same boat, with a lot of Olympus gear, and frankly a lot of fond memories of using it. This financial hanky-panky is worrisome. It has nothing to do with the technical aspects of their products, except that the future product development is on hold. I'm seem to get email every day touting some current product, or sale, so they are definitely pushing to move what is on the shelf now. Survival mode, keep the revenue coming in despite the bad news.

This is only one of a series of crises that have hurt the Japanese technology companies this year. The tsunami closed many plants in spring, then the floods in Thailand in October wiped out Nikon and pieces of Sony and Canon. Olympus slid by that, because much of their assembly is in China.

But until they resolve this accounting fraud nightmare, the company will be very uncertain and cash poor, which may freeze new development for a while. Their problems seem to have receded to the back pages of the financial news, but nothing is resolved. Stock is up a little, buoyed by the fact that the stock price put the value of the company below half the book value of the endoscope division alone.

One scenario is they somehow coast through this, with government help. After all, the investment losses happened 20 years ago, and they were able to hide them behind fake acquisitions for all these years. They got caught though, and now they have to admit the losses and clear the books.

If they can't weather this storm, another scenario is a split with the camera part going to say Panasonic, and the endoscope part going to another established endoscope company. Olympus holds 90% of the market for GI surgery endoscopes -- that's attractive to competitors.

One thing's for sure: the Olympus products I have now are great. I am hoping they can continue as a company to deliver more fantastic products.

 

[Ardy]

Good post slowhands. I think I might try to pick up a spare E520 for under $300 anyone know of any cheap ones?

I guess the 12-60 will never go down in price?????

 

[Prop Joe]

This looks promising:
UPDATE 2-Olympus ex-CEO Woodford to attend board meeting | Reuters

Stock is up almost 20%. Yay! I hope this financial stuff gets fixed and they get back on their feet again. Go Olympus, go!

 

[Ardy]

had a look at ebay expecting that the Olympus DSLR's would be dropping in price but it is exactly the opposite. Maybe others are trying to get a spare to keep their systems going.

Never seem to have the right idea at the right time.

 

[slowhands]

I keep watching the tragicomedy at Olympus unfold. The latest news is mixed: on Dec 21 the police raided the corporate offices for records on the accounting fraud, and Olympus will probably raise cash to stabilize their business ($1.3 billion in new shares to be issued). What puzzles me is why the police waited so long to raid, since by now the records can be sanitized. Indeed, they announced the raid the night before so media could cover it. No doubt a few more senior execs will get fired, then they will try go back to business as usual.
Olympus offices, homes raided in accounting scandal - Yahoo! News

I don't think we need to worry, if they can raise the money. They are a 92 year old firm that employs a lot of Japanese citizens, so there is immense pressure to clean this up and keep people employed. But if they have to make hard choices, the camera division is not very profitable, compared with the endoscope division.

As far as prices dropping on existing gear, it's already dropped to a fairly stable level (I refer to the E series, not M43, which in my view is overpriced). But if there is some more corporate bad news, you might see some dumping.

Another concern is support for older products. Olympus closed the service department in California and concentrated it in the East Coast operation. I just sent in two cameras for repair and the turnaround time was fast and everything came back OK, but I really wonder how easy it will be to get spare parts for service with all that is going on. If you have gear that needs repair, I'd suggest either getting it fixed or selling it. I'm just not sure how long service will be available.

I hope this resolves soon....

 

[Indian Valley Scuba]

I agree with Slowhands, this will all be resolved shortly and life will move on. Great company, great line of products, nothing to worry about long term here.

 

[slowhands]

Olympus is suing its own executives (current and former board members) to recover some of the $1.7 billion loss they hid for 20 years.
Olympus sues execs over scandal, shares surge on M&A hopes - Yahoo! News

That's a distraction from the main challenge: getting new funding to cover the loss by issuing new stock. I suppose they want to be seen as acting responsibly, hence the suits. The board of directors knew about the loss, but acquiesced to the cover up. So they should go, and I suppose lose money too. But hopefully they will go ahead with the stock issue soon. The stock might be issued privately to other strong Japanese companies. "Among firms rumored to be potential buyers or partners in a new capital tie-up with Olympus are Fujifilm, Hoya, Panasonic and Sony."

 

[Ardy]

I could see Panasonic putting in a takeover bid. Wonder what the 'real' worth of the company is?