Interview with Malibu's CEO

[3sport]

Yes, selling equity shares is like free capital, cause you don't have to pay it back. Perhaps they sold their soul for the "free" money, but that is another discussion...

I guess that's one way of looking at it. Shareholders would think otherwise

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[jrz1]

For sure. Added brand, more models in both brands, and I am sure surfgate helped a lot as well.

That said. MC and CC market shares have dropped only 2% or less in the last 5 years. The largest hits were to skiers choice, and the "all others" columns, that both took hits of more than 5%.

They are certainly doing something right!

If you're referring to MC & CC doing something right, you can see what I'm driving now....

[skurfer]

I say this jokingly, Malibu can suck it until they cover pink seats under warranty. As a shareholder, I hope the stock more than doubles, then I will take some money out and let the rest ride…

Wonder what you all would be saying if Malibu had ramfill and/or CATS. Pretty innovative if you ask me. If the quality of the wave is there, I'd take the NXT dash

Edited April 11, 2014 by skurfer

[wakebrdr94]

Wonder what you all would be saying if Malibu had ramfill and/or CATS. Pretty innovative if you ask me. If the quality of the wave is there, I'd take the NXT dash

The NXT dash seems nice, but is the dash enough to make up for the lack of size vs a T22?

The ram fill and cats are neat, but not for everyone. I personally like pumps as it allows for more customization. The CATS still lists the boat, which may be fine for some, but in the video shown, there's only two people in the boat, if you have a large crew are you still moving people in the boat to get the best wave? You really can't have 8 people moving from side to side while in motion. Again, surfgate, NSS, even gen 2 are faster "on the fly" for switching while riding. IMO, If centurion really had that much faith in their system, they'd have been running it during the wakesurfing worlds, not running two separate listed boats.

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Edited April 11, 2014 by wakebrdr94

[skurfer]

I was poking fun at the first NXT released to the world with NO DASH Surfgate, NSS, Gen 2 can switch from side to side quicker, no doubt, but is the quality of the wave better for your style of surfing? Only set up, personal opinion, and time will tell.. You can get them without Ramfill and it is my understanding that without Ramfill but with Sacs, you can get more weight into the boat.

Edited April 11, 2014 by skurfer

[wakebrdr94]

No doubt it's all opinion on which is "the best" wave. I just believe that innovation and progression In the sport will come from transfer tricks, which other manufactures offer. Again, that's just my opinion, I would like to see another company pull the event where transferring sides mid run is done. I think we'd see some interesting things for sure

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[Baddog]

The NXT dash seems nice, but is the dash enough to make up for the lack of size vs a T22? The ram fill and cats are neat, but not for everyone. I personally like pumps as it allows for more customization. The CATS still lists the boat, which may be fine for some, but in the video shown, there's only two people in the boat, if you have a large crew are you still moving people in the boat to get the best wave? You really can't have 8 people moving from side to side while in motion. Again, surfgate, NSS, even gen 2 are faster "on the fly" for switching while riding. IMO, If centurion really had that much faith in their system, they'd have been running it during the wakesurfing worlds, not running two separate listed boats.

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Not a surfer. Don't have a surf boat. Don't currently want a surf boat. But that technology looks pretty interesting.

[TenTwentyOne]

The NXT dash seems nice, but is the dash enough to make up for the lack of size vs a T22?

Wouldn't it only be fair to wait for the NXT22 for that comparison??? That is no different than saying, "Ya the dash seems nice in the VTX, but will that make up for the lack of size compared to the SA350?"

The boat to compare it to, would be the A20.

[85 Barefoot]

Wouldn't it only be fair to wait for the NXT22 for that comparison??? That is no different than saying, "Ya the dash seems nice in the VTX, but will that make up for the lack of size compared to the SA350?"

The boat to compare it to, would be the A20.

Jeez, he's acknowledging he likes the dash and was comparing to the only traditional bowed Axis.

[wakebrdr94]

Wouldn't it only be fair to wait for the NXT22 for that comparison??? That is no different than saying, "Ya the dash seems nice in the VTX, but will that make up for the lack of size compared to the SA350?"

The boat to compare it to, would be the A20.

True, I was merely comparing size of the boat for the amount of money being spent. Even if we compare to an A20, the axis still is roomier with a wider beam, and I would only guess feels more stable on the water. Of course we'll have to wait and see when the NXT hits the water.

As others have mentioned, the axis line was a great addition to help Malibu grow sales. May be the "step child" as some put it, but still a great product IMO.

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[TenTwentyOne]

Jeez, he's acknowledging he likes the dash and was comparing to the only traditional bowed Axis.

What does a traditional bow have to do with a NXT????

[85 Barefoot]

What does a traditional bow have to do with a NXT????

It was my understanding that due to the extraordinary narrow beam, although the glass shows a fork, its actually more like a traditional shaped bow as to interior seating....that not the case?

[TenTwentyOne]

It was my understanding that due to the extraordinary narrow beam, although the glass shows a fork, its actually more like a traditional shaped bow as to interior seating....that not the case?

Judging only by pictures, and comments of those that have seen it in person, that is not the case. The total beam is for sure narrow, however, the gunwales are very narrow, like the new prostar. The interior is (Allegedly) as wide as an average boat with 100-102" beam. I do know, that in a new prostar, the narrow gunwales make a huge difference on interior room.

The PF on the NXT is actually very wide, even compared to other PF MCs. The pics I have seen don't show a straight on photo of the bow interior, but judging by the pics of the prototype show boat, the bow is huge for a 20'er.

I don't have first hand experience, so I could be wrong....

[Fman]

No doubt it's all opinion on which is "the best" wave. I just believe that innovation and progression In the sport will come from transfer tricks, which other manufactures offer. Again, that's just my opinion, I would like to see another company pull the event where transferring sides mid run is done. I think we'd see some interesting things for sure

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That is a great point, watching pro level wake surfing quickly gets boring... 360, 180, shove it, Ali, there really is not a lot of different tricks available to perform in comparison to wakeboarding. Wake transfers would definitely add some more options for the riders.

[shawndoggy]

I guess that's one way of looking at it. Shareholders would think otherwise

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How so? As a shareholder your power is effectively limited to voting for directors and giving or withholding your consent to some big end-game transactions (meger, conversion, dissolution, asset sale. etc.). If you think as a shareholder that you get to choose how the directors employ the money you paid for your stock, you are bound to be disappointed with your investment. Basically, in the US stock market, if you don't like corporate policy your remedy is to sell your shares and move your investment to a management team you believe in.

[shawndoggy]

I say this jokingly, Malibu can suck it until they cover pink seats under warranty. As a shareholder, I hope the stock more than doubles, then I will take some money out and let the rest ride…

Wonder what you all would be saying if Malibu had ramfill and/or CATS. Pretty innovative if you ask me. If the quality of the wave is there, I'd take the NXT dash

'zactly. Neither of those is really in the same universe as surfgate (as opposed to a surfgate vs nss/flow/swell/mcv2 etc comparison)

[BlastRlxi]

Judging only by pictures, and comments of those that have seen it in person, that is not the case. The total beam is for sure narrow, however, the gunwales are very narrow, like the new prostar. The interior is (Allegedly) as wide as an average boat with 100-102" beam. I do know, that in a new prostar, the narrow gunwales make a huge difference on interior room.

The PF on the NXT is actually very wide, even compared to other PF MCs. The pics I have seen don't show a straight on photo of the bow interior, but judging by the pics of the prototype show boat, the bow is huge for a 20'er.

I don't have first hand experience, so I could be wrong....

I was looking closely at a neighbor's new 2014 prostar last weekend and after seeing it I agree with your theory on the gunwales. The Prostar seemed to have a lot of room inside especially on each side of the engine cover. The boat had no back seat in it so that may have made a difference. I'll have to pull up my Txi next to it one of these days for a good side-by-side comparison.

[shawndoggy]

That is a great point, watching pro level wake surfing quickly gets boring... 360, 180, shove it, Ali, there really is not a lot of different tricks available to perform in comparison to wakeboarding. Wake transfers would definitely add some more options for the riders.

You won't see pros doing transfer tricks until you see malibu towing pro wakesurfing events. If past experience is a guide, I wouldn't recommend holding your breath.

Look I really enjoy wakesurfing. I've spent $$$$ getting my boat to make a "great" wave. But the whole concept of "pro" wakesurfing rubs me the wrong way. Seems a little like watching a midget dunk contest on 6' rims or professional rollerblade hockey. I'm not saying that these guys aren't good and don't pull some cool tricks, but nothing is particularly mind blowing to the point that it seems like it should really be a profession.

Maybe when I see this behind a boat (ANY boat) I'll change my tune:

Edited April 11, 2014 by shawndoggy

[3sport]

How so? As a shareholder your power is effectively limited to voting for directors and giving or withholding your consent to some big end-game transactions (meger, conversion, dissolution, asset sale. etc.). If you think as a shareholder that you get to choose how the directors employ the money you paid for your stock, you are bound to be disappointed with your investment. Basically, in the US stock market, if you don't like corporate policy your remedy is to sell your shares and move your investment to a management team you believe in.

You issue shares from treasury and it dilutes existing shareholders. A shareholder wouldn't call that free capital as it effectively reduces their percentage ownership of the company. Not saying raising equity capital is necessarily a bad thing (it obviously isn't in the right circumstances), but it's simplistic to say its free capital unless your only point is it doesn't have to be paid back, which assuming we're talking about typical common stock, is true. Apple could go out and raise a billion dollars right now, but it doesn't. Why not? For a variety of reasons, one being the money isn't free.

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[shawndoggy]

You issue shares from treasury and it dilutes existing shareholders. A shareholder wouldn't call that free capital as it effectively reduces their percentage ownership of the company. Not saying raising equity capital is necessarily a bad thing (it obviously isn't in the right circumstances), but it's simplistic to say its free capital unless your only point is it doesn't have to be paid back, which assuming we're talking about typical common stock, is true. Apple could go out and raise a billion dollars right now, but it doesn't. Why not? For a variety of reasons, one being the money isn't free.

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The board has a fiduciary duty to issue the shares for appropriate consideration, so before or after the shares are issued, the holder of pre-issuance shares holds shares that are worth the same, even if a voting percentage may be diluted.

[wakebrdr94]

You won't see pros doing transfer tricks until you see malibu towing pro wakesurfing events. If past experience is a guide, I wouldn't recommend holding your breath.

Look I really enjoy wakesurfing. I've spent $$$$ getting my boat to make a "great" wave. But the whole concept of "pro" wakesurfing rubs me the wrong way. Seems a little like watching a midget dunk contest on 6' rims or professional rollerblade hockey. I'm not saying that these guys aren't good and don't pull some cool tricks, but nothing is particularly mind blowing to the point that it seems like it should really be a profession.

Maybe when I see this behind a boat (ANY boat) I'll change my tune:

I can see your point, but there are a lot of "sports" that I would question as being professional. I think I it entertains, draws a crowd, and can be marketed to make some profit, it qualifies.

Look how far action sports have come in general. Remember when people thought a backflip in Mx would never happen? Or wakeskating is a lot of shove its, spins. Etc. I think the wake to wake transfers opens up for the possibility of new tricks. That has been my argument from day 1. The list wave may be "better" but the wave devices open the door to so much more. And they will continue to get better.

Malibu did itself a big favor by outing surfgate onto axis. I believe they had to. Going forward, I would have to believe that they need to do the same with the ride series or scrap it. That would sell a lot more boats as the ride would be cheaper, and appeal to those who do not like touchscreens, etc. There is a market for the simplicity of things and the axis line has proved it.

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[3sport]

The board has a fiduciary duty to issue the shares for appropriate consideration, so before or after the shares are issued, the holder of pre-issuance shares holds shares that are worth the same, even if a voting percentage may be diluted.

If it's that simple, why do companies avoid going to the markets when their share prices are depressed - doesn't the market just represent what the shares are then worth? Why do share prices often drop below the offering price after a financing is announced? What about the impact issuing additional shares can have on earnings per share? What about where prices rise after an equity raise - were the shares sold too cheap? What about the costs of doing an equity raise? Not saying raising equity isn't ever good, just that there's a cost associated with it - it's not free money. It's a lot more complicated than that, which is why companies don't go out and sell shares every time they need capital.

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[85 Barefoot]

If it's that simple, why do companies avoid going to the markets when their share prices are depressed - doesn't the market just represent what the shares are then worth? Why do share prices often drop below the offering price after a financing is announced? What about the impact issuing additional shares can have on earnings per share? What about where prices rise after an equity raise - were the shares sold too cheap? What about the costs of doing an equity raise? Not saying raising equity isn't ever good, just that there's a cost associated with it - it's not free money. It's a lot more complicated than that, which is why companies don't go out and sell shares every time they need capital.

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The only way that is is not "free" is the dilution of ownership but an IPO can still secure the value of the previous ownership in numerous ways and be totally insulated from stock price.

I do find it interesting stock is up almost 50% since release and has not retracted. There is legitimate interest in holding the stock, which is reassuring.

[3sport]

Yes, dilutive to ownership, which is more than a right to vote.

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[Cory]

This whole corporate governance debate is off topic. I was simply commenting that Malibu is the only in-board tow boat that has gone public (to my knowledge). This has allowed them to erase their debt and raise a butt load of money for factory expansion and R&D that doesn't negatively impact their balance sheet. I'm just curious how this skews the marketplace for their competitors that don't have this level of access to capital, without financing costs. Will this allow Malibu to price undercut their competitors and take even more market share?

I realize that going public will have all sorts of other issues that their private competitors wont have to deal with, but perhaps in Malibu's scenario, where their factory was running at max capacity and they are poised to steal more market share, going public at this moment may have been the right decision for both the VC's and the company. I too fear that they will start cutting corners for profit too.