Memo to Robinhood traders: “Bankruptcy” usually means the equity gets wiped out

Memo to Robinhood traders: “Bankruptcy” usually means the equity gets wiped out

Quick primer on how it works, given Hertz is about to pull the world’s first Initial Bankruptcy Offering: The senior debt holders are first in line Subordinated debt holders are next in line Creditors, suppliers, vendors, including employees and pension funds are in this line Equity holders (this means you) are the very last in line and they get a fraction whatever is left, which is often NOTHING Good luck in the scramble to buy Hertz…

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Thematic next-wave portfolio constructor Motif goes bust

Thematic next-wave portfolio constructor Motif goes bust

Motif trading platform, which claimed to use data driven methodologies to enable the creation of thematic and “next-wave” portfolios (translation: they grep 10Q’s for keywords) has rather abruptly shut  down. Their own advisors heard about it via Twitter. Yes, it did come with %FIRSTNANE%, who cares I guess… pic.twitter.com/3IuwpuBJQG — Hylland Capital (@HyllandCapital) April 18, 2020 They also had developed some  “next generation thematic ETFs” like “human evolution reimagined” (SPTX), which were launched by Goldman…

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Siri: What is a “Unicorn circle jerk”?

Siri: What is a “Unicorn circle jerk”?

Carta, a unicorn that makes dashboards for managing equity investments in other unicorns is laying off staff and sniffing out a cash injection from existing backers. Bloomberg reports that the company is seekng a $200 million investment from existing investors at a $3 billion valuation, up from 1.8B last year. Somewhat incongruent with the “growth story” picture that normally garners such a sharply higher round, Carta is laying off employees. They just axed 161 people…

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AirBnB Pivots to “Virtual Experiences”, Lands $1 Billion Down Round

AirBnB Pivots to “Virtual Experiences”, Lands $1 Billion  Down Round

AirBnB, the tech unicorn that monetizes your spare room has been hit hard by the Coronavirus academic. As the company and the phenomenon grew, more and more “investors” levered up to buy more properties to rent out short term. Some becoming so-called “super-hosts”, running dozens or even hundreds of rental units. There even emerged a phenomenon, of “STR arbitrage“, which is Short Term Rental Arbitrage: taking out long term leases on properties you don’t own,…

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Tesla to lay off up to half of sales and delivery staff

Tesla to lay off up to half of sales and delivery staff

CNBC reported Friday that Tesla will be laying off up to half of it’s sales and delivery staff, this comes on the heels of other layoffs reported earlier in the week. Salaried employees are looking at pay cuts of 10% to 30%. In other news, Elon’s brother Kimball appears to have pulled a switcheroo on his employees “emergency fund” for his Nextdoor Restaurant chain, pulling the plug on the fund right before he laid off…

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Pley, that hot start-up that rented Legos by the month inexplicably failed.

Pley, that hot start-up that rented Legos by the month inexplicably failed.

So yeah, I decided with WeWork and $TSLAQ and assorted unicorn b.s (like TIL that Softbank put $300M into a dog walking app can you believe that?) even though I’m busy with normal things, I am rekindling VCrap. On a whim I decided to look up a company I heard about a few years ago, a hot start-up that secured $6.75M series A …to rent Legos by the month. That was in March 2014. In Feb,…

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Bloomberg: WeWork floats “governance change” to salvage IPO

Bloomberg: WeWork floats “governance change” to salvage IPO

As per Bloomberg: WeWork desperately scrambles to salvage an IPO being spurned by the investing public by floating a “governance shakeup” although any reforms would still leave Neumann with total control over what happens because of the share structure. Also, the article opines that nobody is sure what governance changes remain to be made, given that “The company already has taken some steps, such as adding a woman to its board and having Neumann return…

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VentureCrapital initiates coverage on $TSLAQ

VentureCrapital initiates coverage on $TSLAQ

I had all but mothballed this project because, frankly, I was neglecting it. But lately I’ve been feeling like some kind of inflection point has been reached. When multiple unicorns are underwater or in danger of going underwater on their IPOs ($TLRY, $SNAP, $UBER, that other one…. ) or at least looking like they should be under water ($BYND) and then WeWork looking like it may not even make it to the gate…. combined with yield curve…

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Unicorns Jump The Shark: WeWork IPO In Danger of being Shelved

Unicorns Jump The Shark: WeWork IPO In Danger of being Shelved

For some reason the investing public seems to be giving the WeWork IPO a suboptimal reception. After multiple reductions in the IPO sticker price, from 40B down to 20B and now perhaps even less, the lead investor Softbank is recommending that the IPO be shelved. For some reason when the CEO cashes out 700 million ahead of the IPO in a company whose losses exceed total revenues people aren’t overly eager to put in more money….

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WeCash-out, before IPO

WeCash-out, before IPO

The WSJ today reported on how WeWork co-founder and CEO Andrew Neumann has extracted $700,000,000 in share sales and loans from his money-losing, pre-IPO unicorn. So far Neumann has purchased 4 homes around New York, funded an elementary school his kid goes to, and paid $14,000,000 for a 13,000 squarre foot crib in the Bay area that has a guitar-shaped romper room. He also buys properties and leases them back to WeWork. All very confidence instilling for…

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