Notable (Gaming, Guns, Fees and More)

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Activist Investing: A deep dive into what has made Elliott Management successful. 

Casinos & Gambling: The Supreme Court is considering arguments that will dictate the future of sports betting at casinos and racetracks around the country - a potential lifeline to an industry that has been plodding along. New Jersey is getting ready for some positive nows.

Guns (Long Irony): Donald Trump hasn't threatened the gun industry enough. Without the fear of increased regulation (which, of course, is mind-boggling after Las Vegas, but we digress), gunmakers are heavily discounting product and their stock is going in the sh*tter. American Outdoor Brands Corp. ($AOBC) and Sturm Ruger & Co. ($RGR) both saw stock declines this week on the news of slashed profit targets.

Healthcare: A running tally of all of the bankruptcies in 2017. The performance improvement consultants must also be at high capacity. Scripps Health, for instance, announced $30mm in cost cutting this week. And community health centers are apparently suffocating without federal funding from Congress.

Professional Fees: Caesars Entertainment Operating Co. is primed to pay $160mm in legal fees. Importantly, this number does not include the fee totals paid to financial advisors, investment bankers and the company's claims agent. Apples to grenades, we admit, but considering the fees seen in bankruptcy, Robert Mueller's $6.7mm nut over five months of investigation seems pretty lean and efficient to us. Just saying.

Retail (The Rise of Clicks to Bricks): Everlane is the latest digitally-native vertical brand that is embracing physical locations. Relating to the company's CEO, "He started the company understanding stores as albatrosses on the bottom line; now, he sees the value in them as temples to the brand." Meanwhile, FAO Schwarz is attempting yet another brick-and-mortar comeback in NYC.

Post-Reorg Equities, Oncor, & Elliott Management

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Paul Singer is Keeping Busy

We've previously discussed post-reorg equities here, noting the mild rollercoaster that Peabody Energy ($BTU) equity has been on post-emergence. This week Elliott International Inc. filed a 13-D highlighting increased ownership in the stock. Speaking of Elliott, the firm received additional time to further consider its bid for the Oncor assets it is purportedly competing withBerkshire Hathaway for. Here (video), Elliott's Paul Singer clowns on the value of Trump bonds. Elsewhere, a lot of bonuses just got flushed down the toilet as Basic Energy Services ($BAS) reported earnings and the stock promptly traded down nearly 20%. Management resorted to boring tropes about the weather and holidays affecting revenue.

Private Equity Dogs = No Fortune 500 $KKR $BTU

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The Fortune 500 list came out and one of the companies that fell off of the list is KKR ($KKR), with causation linked to the firm's horrendous Samson Resources investment. Ouch. Peabody Energy ($BTU) was another notable fallen star. Elsewhere in private equity, Paul Singer of Elliott Management Corp. gives zero f*cks about what we all think. And, interestingly, Avenue Capital Group israising a second distressed energy fund (of $1b AUM). There is a boatload of dedicated money to distressed energy still waiting on the sidelines and so we find it interesting not that Avenue believes it can raise money in this space but that it can deploy it - at this juncture and in this competitive landscape - on opportunities that will provide a good rate of return. That's obviously not a bullish sign for the space. If they're right. Finally, stay tuned for a new report on the net job effect of PE from HBS researchers. In brief, the previously study - which subsumed data through 2005 - showed only a "modest net impact on employment." PE firms loved that sh*t because it made them look not-so-evil. What's happened a lot since 2005? A lot of PE. And a lot of dividend recaps. Popping popcorn and waiting for the new findings....
 

Notable (3D Printing, Elliott Management, Sycamore Capital Partners, etc.)

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3D Printing. We've previously noted the potential game changing effect of advancements in 3D printing technology. This view - from the bloggers at UPS - is a little more tempered but interesting nonetheless.

Brookfield Asset Management. Interesting.

Energy M&A. Reportedly, Vistra Energy Corp. is making moves to take over Dynegy Inc.

Gearing for Battle. Elliott Management is hiring to prepare for a restructuring wave (firewall).

Short Coke & Pepsi (read: Bottled Water). On one hand, the volume of plastic water bottles is absurd and harmful to the environment...we get that. On the other hand, however, do we really need a BtoB subscription service for...wait for it...NYC tap water?!? We're split as to whether this is "notable" for its earnest save-the-environment vibe or for its "is this really a frikken problem in need of solving" vibe. We're leaning towards the latter.

Smoking-More-Crack.live. A nice little ranty blogpost from a petulant Eddie Lampert.

Sun Capital Partners & Sycamore Partners. The firm is looking to sell British bedding retailer Dreams - which it acquired out of administration back in 2013 - with Chinese companies in the mix to bid. Rothschild is the investment banker. Meanwhile, to avoid seeing another portfolio company in bankruptcy court, the firm has agreed to, in the event of a rights offering, recapitalize Vince Holding Corp. ($VNCE) with $30mm. Meanwhile, this was an interesting piece on Sycamore Partners and its potentially evolving strategy (though it neglected to acknowledge how dire Nine West is beginning to look).

Trickle Down Economics. Bullsh*t.