Sexy Time (Long Robots, Short Strippers)

in

Odd week for sex. Penthouse Global Media, a company that probably needs no description, filed for Chapter 11 bankruptcy this week. Not for the first time. No worries, though, sex has entered blockchain territory because humans apparently can't be trusted to do things on a consensual basis. That is, if you even need two humans: winning the bad-timing award, CES featured robotic strippers this year. Wait. Even strippers are in danger of being automated into obsolescence?! We suppose the brightside is that robot strippers won't be required to sign blockchain-based NDAs in the event that they cavort with a future President of the United States. 

GoPro is in Trouble

in , ,

Long the "Hardware is Hard" Narrative

GoPro Inc. ($GPRO) announced extreme guidance this past week. Extremely bad guidance. The hardware-manufacturer-wouldbe-software-developer-wannabe-content-provider-aspiring-drone-player lowered guidance for revenue and gross margin and offsetting measures like job cuts, exec compensation cuts, and discontinued products (discounted drones anyone?). Disputed reports abound that JPMorgan has been hired by Nick Woodman to shop the company. Doesn’t sound like he’ll be doing many guest Shark Tank appearances anytime soon. The company has a $300mm credit facility and $150mm in converts. With negative operating cash flow and and increasingly bad trends, Woodman may soon be fielding pitches from restructuring bankers. 

But at least he's still in business. Luma, a home WiFi system maker reportedly had to effectively sell for parts to First Alert. Investors included Andreesen Horowitz, Accel Partners and, get this, Amazon Alexa Fund. Similarly, Eero, the mesh Wi-Fi router startup, laid off 20% of its workforce. It has raised $90mm in VC. Yes, hardware is hard.

But not all tech is "busted" and not ALL hardware is "hard." Apparently 16% of Americans now own a smart speaker. In case you weren't convinced that "voice" may be a VERY big piece of the future. As we noted around this time last year on PETITION, mass adoption of voice has the potential to disintermediate brands and cause more retail distress. 

Fast Forward: Week of 1/7/17

in

Destination Maternity is churning through management while continuing to insist that Berkeley Research Group is only providing operational improvement services. Fieldwood Energy has a little more time. Neiman Marcus is getting serious about engaging various creditors about its well over-levered balance sheet ($4.9b of debt). Steinhoff International Holdings N.V. is in the market for a Chief Restructuring Officer. Before year end, there were some interesting happenings with Sungard AS that may portend some action to come.

Circuit City is BACK.

in

Circuit City. It's back. On Monday, the CEO of Circuit City announced via press conference - at CES no less - the re-launch of Circuit City and the messaging on it is everything you'd expect from a once-brutally-disrupted retailer seeking to re-emerge in 2018. "Social-focused e-commerce?" Check. "AI?" Check. "Web platform?" Check. The website is lit, complete with this highlight, "For the new breed of American workers who we call the “millennials”, we will offer 24/7 Customer Service...." Yeah, sure, good luck with those American workers you call "millennials." Alexa, please block all messaging from Circuit City. 

Lawyering (Points for...Honesty?)

in

We cringed at THIS embarrassment. Honestly, we could snark about this until the cows come home but there's really not much more we can add. Answer here for the non-litigators.

Speaking of lawyering, we thought this bit about insider trading was interesting and serves as a cautionary tale to those who are uber-cavalier about talking themselves up. You know the types. There are industry folks who are so insecure that they feel the need to constantly show off what deals they are working on. Makes good cocktail party conversation. But, a number of these companies have publicly traded equity or securities. While the insider trading laws are murky and ever-changing, we're pretty sure that industry folks don't want to find themselves on the other side of an investigation. Moreover, we're guessing that, at least in a few instances, the mere disclosure is a breach of attorney-client privilege. So, don't do that. 

Trickle Down from Auto Disruption (Short Insurance)

in , ,

We’ve spent a good amount of time in the last year discussing the second order effects of autonomous cars. But, clearly Google is thinking ahead. This week Waymo LLC, the driverless-car unit of Alphabet Inc., partnered with an insurance-tech startup called Trovto nail down the mechanics of “micro-duration” insurance for riders. This would be “usage-based” insurances, covering riders for very discreet periods of time and very particular use cases. Risk could be assessed based on the duration of the ride (and, presumably, the trajectory?). This could be a game changer as far as insurance revenues go. Choice quote: “As much as 80% of the premiums paid to car insurers are at risk of disappearing in coming decades if autonomous vehicles make driving safer and prompt big changes in car ownership.” Yikes.

Digital Media (What is Dead May Never Die)

in

Former employees have initiated a crowdfunding campaign to support Gawker, keep the sites/archive out of the evil clutches of Peter Thiel and "preserve its history." Speaking of never dying, serial entrepreneur Sophia Amoruso announced $3.1mm in seed funding from Lightspeed Venture Partners (big winners in Snapchat) for Girlboss Media. 

Retail I (Spending Surprises to the Upside)

in

US retail sales were up 0.8% in November vs. an expected 0.3% increase, a good sign for the economy in Q4 provided that a vast majority of those sales don't end up getting returned immediately after the holidays. The link has an interesting chart. It doesn't appear, however, that European retailers like Hennes & Mauritz AB (H&M) can revel in the news. The company - previously blamed for the decline of fashion retail in the US due to its fast trend-based innovation and production - reported dogsh*t numbers earlier this week. Notably, "[t]he H&M brand’s online sales and sales of the group’s other brands continued to develop well. Meanwhile, the quarter was weak for the H&M brand’s physical stores, which were negatively affected by a continued challenging market situation with reduced footfall to stores due to the ongoing shift in the industry." The company may be forced to slow expansion plans and close stores. 90 is the number currently floated. We expect there to be more. 

Westinghouse (Get Off My Lawn)

in

The Southern District of New York bankruptcy judge Heisman'd the official committee of unsecured creditors earlier this week after they attempted to propose a plan of reorganization mere days after the company's parent, Toshiba Corp., filed one. Meanwhile SCANA Corp. ($SCG) is in a war with the South Carolina legislature over whether the utility may continue to pass the costs of abandoned nuclear reactors to customers of electricity. If it loses? The company says it may have no choice but to file bankruptcy. Elsewhere in nuclear power, Santee Cooper has commenced an operational restructuring.

Oil & Gas (Long Proven Operators & Production)

in

In a week where another oil and gas exploration and production company filed for bankruptcy (see Cobalt Energy International), private equity firms are putting millions of dollars of dry powder to work by backing proven operators. Here, Warburg Pincus LLC has made one of the largest private equity investments ever in shale, agreeing to invest $780mm in an E&P team with two meaningful previous exits. Interestingly, this comes as OPEC continues to discuss prolonged oil supply restraint. Not that the frackers care: the International Energy Agency says that OPEC's efforts may be offset by US shale companies increasing production as oil hovers near $60/barrel. Curious: where do readers think oil will be for most of 2018?

Millennials (Long the "Great F*ckening")

in

We're looking forward to the inevitable First Day Declaration "Events Leading to the Chapter 11 Filing" section wherein the company simply says, "Millennials." Full stop. That would be amazing (and save a lot of paper). But is everyone being too hard on this demographic? Read THIS and draw your own conclusions. So much to unpack in it. "It’s tempting to look at the recession as the cause of all this, the Great Fuckening from which we are still waiting to recover. But what we are living through now, and what the recession merely accelerated, is a historic convergence of economic maladies, many of them decades in the making. Decision by decision, the economy has turned into a young people-screwing machine. And unless something changes, our calamity is going to become America’s."