Gibson, what happened?

There’s been talk of bankruptcy swirling around Gibson, the venerated Nashville-based guitar company, which takes in more than $1.2 billion in annual revenue but is more than $500 million in debt. Buzzards are circling. Kohlberg Kravis Roberts, the private equity giant, is a bondholder. Blackstone is also a major lender.

Gibson’s problems are not hard to diagnose. The company’s longtime chief executive, Henry Juszkiewicz, wanted to diversify by turning Gibson into what he has called a “music lifestyle company” — basically a consumer electronics business that sells headphones and hi-fis as well as guitars. He made a splashy purchase of the audio and home entertainment division of Netherlands-based Royal Philips in 2014, and then ran headlong into the collapse of the euro.

It was a disaster. Mr. Juszkiewicz, in an interview, didn’t sugarcoat it.

“No, it wasn’t a great decision,” he said. “It didn’t work out very well. I think it was a rational decision, but it turned out to be a very poor decision, and it’s a decision I made. It is what it is.”

Before we go further, we need to step back and take stock. Much is at stake.

Chuck Berry’s “Maybellene,” which is now in the Smithsonian, is a Gibson. Tony Iommi of Black Sabbath wields a Gibson SG. Slash, of Guns N’ Roses? The company calls him its Global Brand Ambassador.