Blogs & Comment

Winners & Losers: Spin Master preps a dino-sized IPO, Colt misfires

Maker of “smart gun” technology turns out to be less than brilliant

 Spin Master

Not playing around

Dino Zoomer toy

Spin Master’s Dino Zoomer toy. (Spin Master)

Oh, how about that. Another Canadian company going public. So many firms are announcing IPOs these days that it’s almost ceased to be noteworthy. Not to take anything away from Spin Master, the latest to test the market’s appetite for a share offering. The Toronto-based toy company hasn’t revealed how much it’s planning to raise, but its prospectus shows it’s a company that’s growing at a healthy clip. Revenue in the first quarter totalled $117 million, up 35% over the year before. Spin Master controls about 2.8% of the U.S. market, making it the fifth-largest toy company. Back in the ’90s, Spin Master scored a hit with its Air Hogs brand—a line of air-pressured powered planes that had the amazing ability to always land in trees or the neighbour’s backyard. Its Bakugan line of battling figurines was another hit—until it wasn’t. Spin Master went through a painful restructuring when sales declined in 2010 and axed 35% of its staff, but has since recovered with products like Zoomer, a robotic dog, and Boomer, a robotic dinosaur. With any luck, Spin Master’s stock will perform better than my schoolyard chum’s Air Hog that crashed to Earth and splintered in cheap plastic shards like a broken childhood dream.

 Colt Defense

Shooting blanks

Colt revolver

Colt revolver

Gunmakers have often been accused of being morally bankrupt, and now one of them is financially bankrupt, too. Colt Defense, the 179-year-old arms manufacturer based in Connecticut, filed for bankruptcy protection this week after numerous strategic missteps. The company lost out on lucrative government contracts over the years, largely abandoned the police force market, and spent a lot of resources trying to develop “smart gun” technology that it said could help prevent unsafe use of firearms. Colt was a pioneer of this technology in the 1990s, when it built a prototype that would only fire when the user was wearing a ring emitting a certain radio frequency. The head of the Independent Firearms Association, which offers photos of Ronald Reagan shooting an AR-15 that are “ready for framing,” told the Associated Press that gun owners viewed Colt’s smart gun tech as an affront. “Instead of doing it to protect gun owners’ rights, they appeared to be part of the [non-existent, right-wing paranoid delusion of an] assault on gun owners’ rights,” he said. The lesson for other businesses here is obvious: know your trigger-happy market.