This isn't a good outcome for Zoox, which raised its Series B at a $3.2B post-money valuation in July 2018. The company also raised ~$200M of debt in 2019 and nearly $1B in total funding. Meaning it's likely only investors will get paid out for this $1B exit.
Employees do get their wages, but most were probably working on depressed wages in lieu of equity compensation -- which will now be zero. Further, if anyone left/laidoff, and they forcibly exercised options due to windows, they are underwater.
I'm hoping there will be a market shift where startups stop over hyping the value of stock options. Things like exercise windows and sparse liquidation events make stock options a raw deal.
IIRC, Zoox was out fundraising. From the employee perspective, a guaranteed gig at Amazon is better than being laid off. Equity value was probably a sunk cost at this point.
I'm assuming that Amazon is offering retention packages to the employees, otherwise, why would they bother acquiring the company?
Early employees who were dreaming of a windfall aren't going to get one I guess, and anyone who left the company or was fired and exercised is totally screwed.
Right, but how great are those packages gonna be when Amazon (renowned for their stunning committment to worker's rights and freedoms, /s) knows that anyone who doesn't take their offer will join the ranks of the 'totally screwed'?
The typical result of M&As is, by and large, that the workers lose.
If you're buying an established business, then yeah most likely it's not gonna go well for the employees, since your whole thesis is that you can extract more profit post acquisition then pre acquisition.
That's not what's happening here, though - Zoox's assets are worthless without their employees, so its in Amazon's interest to not screw them over completely.
It seems that they already saturated their Direct to Consumer channel and all their growth is now dependent on their wholesale efforts. It seems risky to me, especially with a slow-cycle business like mattresses. Also what happens if retailers create their own premium brands and/or secure exclusivity deals with other manufacturers?
those are great (fantastic?) margins but i don't understand why they're not higher? there are so many memory foam mattresses on amazon that are exactly the same thing (maybe slightly shallower "soft foam" that run for e.g. ~300 for a queen that are themselves probably making great margins.
I have a Casper and I tend to sweat a lot at night so I was looking for a more premium mattress with better ventilation. When I've spent the night with "friends" who have cheaper foam mattresses, I often wake up drenched in sweat.
it has very little to do with mattress, hot air from your body tends to behave as psychics would dictate and will go through your blanket upwards, or whatever you sleep under. Most reasons for sweating is your AC blowing cold air at you at night when you sleep. When your head is cold the body raises temperature and hence you sweat under blanket.
Last thing to change would be another grand on new mattress.
"When I look out at the landscape of personal financial products, so many of them focus either on analyzing money or managing/moving it, but not both. Doing this in a holistic manner is difficult, especially with accounts across institutions. But it seems to me that it is the key to having an actually organized and manageable financial life."
While a surprising statistic, this number has actually improved in the last five years. "This is an improvement from half of adults in 2013 being ill-prepared for such an expense [$400]" - Report on the Economic Well-Being of U.S. Households in 2017 [0]
This feels a bit like damning with faint praise; the most likely cause of an emergency debt is a trip to the hospital, and the average deductible of a US employee on private health insurance is $1500 (closer to $3000 for family coverage).
(We don't need to bother considering people who don't have jobs and thus don't have insurance; the failure mode for them, as before, is "resign yourself to lifelong financial ruin and dodging debt collectors".)
So the question then is: what percentage of households can cover a $1500 emergency bill, rather than a mere $400 bill? And, at the rate of growth since 2013, how many decades will it take for that number to creep up to 50% (and don't forget to adjust for inflation).
>> Please note, customers who choose leasing over owning will not have the option to purchase their car at the end of the lease, because with full autonomy coming in the future via an over-the-air software update, we plan to use those vehicles in the Tesla ride-hailing network.
Reality: it's a price increase. "Model 3 Standard Plus used to cost $37,500, plus $3,000 for the Autopilot option. It now costs $39,500, with Autopilot included." No $35,000 Tesla.
* it's a price increase. "Model 3 Standard Plus used to cost $37,500, plus $3,000 for the Autopilot option. It now costs $39,500, with Autopilot included."*
$37,500 + $3,000 = $40,500. Isn't that a price decrease if the price is now $39,500?
Not if a significant fraction of buyers decided to skip autopilot after seeing Youtube videos of AP driving into stationary objects.
Keep in mind that Tesla just started selling lower priced models in the US. Buyers of the base models are much more cost concious, so I assume that a lot of them would forego the AP option.
There is no way any of these model 3s end up in an autonomous ride share. Especially with only cameras and no LIDAR. I guess it does give them cover for not offering the option to buy at the end of the lease. Wouldn’t be surprised if they reverse this in 2-3 years.
Sometimes I wonder if the much-ballyhooed short-sellers actually work in the Tesla marketing department :-)
I know that companies get a lot of flak for saying hedged things. But Tesla could really benefit from some hedging. This pronouncement in absolute terms that there will be no lease-end buyout is ridiculous. It depends entirely on future factors unknown today (to us or Tesla), whether they will give customers the option of buying out when the lease and actually arrives, and they know it.
So why not just say so? How about: “Tesla leases do not guarantee the right to buy-out at lease end, because we hope to use some of the after-lease cars for a future ride hailing network.”
Sure, it's a few more words to parse. But it would be one less thing for people to complain about. And it would be true and forthright. It is very good to be seen as true and forthright when asking customers to spend tens of thousands of dollars on something.
The buy-out price at the end of the lease is set by the lessor. If they don't want to sell, they could just set the price very high. No need to announce that now - in fact, doing so will simply reduce sales.
Pretty much no other industry uses old hardware for rentals.
Go and try to rent a 10 year old car... Can't find any? Turns out while individuals are perfectly happy to drive a 10 year old car, companies prefer no more than 1-2 year old fleets. As well as being more reliable, the service users don't want to find a cassette player in the car, nor years of grime on every surface.
I don’t understand why they refuse to at least add forward-facing LIDAR. Lane paint sabotage, low-contrast lighting situations and construction are just a few risks that make me nervous to trust autopilot at highway speeds.
I say this as someone that is bullish on autonomous driving and in awe of Tesla in general.
"For the year ended December 31, 2018, we generated revenue of $755.9 million, as compared to $472.9 million for the same period in 2017, representing year-over-year growth of 60%. For the year ended December 31, 2018, we generated a net loss of $63.0 million and Adjusted EBITDA of $(39.0) million, as compared to a net loss of $130.0 million and Adjusted EBITDA of $(93.0) million, respectively, in the same period in 2017"
Wow, I would love to know how they can make so much revenue and make a loss.
I only know Pinterest from annoying search results where it immediately asks you to sign up for an account, and I immediately leave - does anyone have any insights into how on earth they are spending almost a billion dollars in a year?
Curious how this would change if R&D was capitalized. Of course it would just make ebitda a less accurate proxy for cash flow but we’d still be looking at it very differently.
assuming that the R&D expenses largely convert into some kind of assets.
edit: is anyone able to comment how the accounting for this kind of thing usually works?
e.g. if a company spent $1m on R&D, can it arbitrarily add a line item on its balance sheet for around $1m of research outputs as some flavour of intangible asset? (this is obviously not a very accurate way to account for things in cases where the R&D failed to produce anything of utility, or produced much less utility that the R&D cost) or are the assets produced by R&D (if any) meant to be fairly valued in isolation from the cost to produce them?
This is called capitalizing. Companies are not allowed to do it with R&D under GAAP. But it gets tricky when one company can build a factory, call it capex, and spread the expense over 10 years. Whereas another builds software infra and must expense 100% immediately.
I don't pay for cable, but there are similar economics in Internet routers/modems. Comcast used to charge me $10/month to lease their unit. After a few months of spotty WiFi (used cell data instead), I finally called. Service rep said that ~1/2 of the my specific router model were defective.
Finally purchased my own [1], which will pay for itself after a year. This is one of the easiest ways to save money.
Good point- This is an affiliate link. I actually don't want the money from Amazon from the referral link, I signed up for Amazon Associates for the API access to their product catalog for a side project. Amazon requires a certain level of activity for this. So if someone happens to buy, you're supporting a side project.
On net, the minimum wage increase from $9.47 to as much as $13 per hour raised earnings by an average of $8-$12 per week. The entirety of these gains accrued to workers with above-median experience at baseline; less-experienced workers saw no significant change to weekly pay. Approximately one-quarter of the earnings gains can be attributed to experienced workers making up for lost hours in Seattle with work outside the city limits. We associate the minimum wage ordinance with an 8% reduction in job turnover rates as well as a significant reduction in the rate of new entries into the workforce.
