The Water Coolest is a free daily business news and professional advice email newsletter created for weekday warriors that is delivered fresh daily at 6 AM EST. Signup here to receive The Water Coolest every weekday.
LET IT GO
Sears is the herpes of mall retailers. It. Just. Won’t. Go. Away.
Right on cue, a court has allowed Eddie Lampert, Sear’s former CEO, to re-submit a bid to save the retailer. The most recent chapter in Sears’ storied history will end one of two ways: with Lampert continuing to run the retailer into the ground or with unsecured creditors getting their wish of liquidation.
Earlier this week Lampert had a $4.4B bid rejected because, surprise, the hedgie had inserted quite favorable terms, including a “credit bid” which forgave $1.3B worth of ESL (Lampert’s hedge fund) loans and a clause that would release Lampert and others from future lawsuits related to this clusterf*ck.
So, on Monday Lampert plans to submit a more creditor-friendly (did we mention he is also a creditor?) bid when he faces off against Sears-appointed liquidator, Abacus Group. Eddie Big Box will be forced to pony up a $120M non-refundable deposit for the privilege to bid on the complete and utter pile of sh*t.
Unsurprisingly, Lampert is playing up the “iconic retailer” and “50k jobs” card in an attempt to “save 425 stores from liquidation.”
NEW NAME, WHO DIS?
Me: *Checks in to see how WeWork is taking the Softbank news*
Also me: *Gasps audibly*
To say that WeWork is not taking the news (that Softbank would reduce a proposed $16B investment to $2B) well would be putting it lightly.
The hip office space lessor has gone full Britney Spears circa 2007. Not only has the company rebranded as The We Company, but it also announced plans to “elevate the world’s consciousness” … whatever the f*ck that actually means.
Dropping “Work” isn’t a legal name change for WeWork, but it will encompass all three of its current business units: WeWork, the largest private office operator in Manhattan, WeLive, its apartment leasing arm, and WeGrow, which runs an elementary school in NYC. The name change signals a grand plan to facilitate all aspects of urban life … or something like that.
So, how bad is it?
Well, that’s TBD. Many analysts and investors are predicting an economic downturn over the next two years that will have an adverse impact on WeWork’s ability to retain paying tenants. Not a great prediction for a company that lost $723M on $764M in sales in the first half of 2018.
In addition to the economy, We is also facing an uphill battle against landlords and real estate brokers, who are looking to win back market share.
YOU SHALL NOT PASS!
Day 19 of no government: government employees are playing the tambourine on the Jimmy Kimmel Show.
Let’s check in on the US government, shall we? The House of Representatives approved a bill that would end the government shutdown and fund 8 of the closed US departments through September 30th, 2019. It would also fund the Department of Homeland Security through February 8th. So the government shutdown is over?! Think again …
Senators have already indicated that they will not greenlight the bill in an effort to save The Donald the time and effort it would take to stamp the bill with a comically large red “VETO” stamp.
In case you’ve been living under a rock, the government has been shuttered for 18 days and counting, making it the third longest respite in US history.
As Congress searches for a solution a key sticking point remains: $5B funding for a wall between the US and Mexico. How big of a deal is the wall, you ask? Big enough that Donny Politics held a news conference live from Oval Office last night making his pitch for it.
Sh*t’s getting real
There is a real concern for many government employees who have not been paid in two-plus weeks. Some federal workers have resorted to GoFundMe to help subsidize their lack of a paycheck.
And worst of all, the “Super Bowl of Astronomy,” conference in Seattle was all but canceled due to government scientist’s absence. Such. A. Shame.
IN OTHER NEWS
- Apple is cutting planned production of the three new iPhone models by 10% for Q1. This comes a week after the company cut its quarterly sales forecast and asked its suppliers to produce fewer than planned iPhone XS, XS Max, and XRs. Overall planned production of old and new iPhones has dropped from 47-48M units to 40-43M units.
- Juul is launching its first television ad that will feature adult smokers who have quit cigarettes thanks to e-cigs. Tobacco companies have been restricted from advertising on print and TV since the 1970s thanks to market regulations, but those rules have not been extended to e-cigs. Looks like Don Draper is coming out of retirement.
- AT&T appears to be preparing a “geographic rationalization” and will consolidate some operations into ten major hubs. Apparently, mergers, acquisitions, tax cuts, and deregulation aren’t enough to sustain desired profitability, but layoffs are just what “the Bobs” ordered.
- Metlife CEO Steven Kandarian has named April 30 as his retirement date. Michel Khalaf will take over as CEO of the nation’s second-largest life insurer by assets. In other CEO news, Herbalife CEO Richard Goudis will resign just seven months after taking the role, after the company discovered previous comments that were inconsistent with its standards.
Ready to become the most well-informed bro in any room? You can subscribe here.