In a rather explosive turn of events, bankrupt rocket company Virgin Orbit has announced its decision to shut down after selling its assets and equipment to several aerospace companies in a fiery auction. The company, which had filed for bankruptcy protection in April, failed to secure a funding lifeline and had to resort to drastic measures.
The bidders in Monday's auction included Rocket Lab, Stratolaunch, and Vast's Launcher, all vying for a piece of the rocket pie. The total amount of the bids reached a staggering $36 million, leaving Virgin Orbit's six rockets and intellectual property still up for grabs.
Rocket Lab successfully secured the company's headquarters in Long Beach, California, for a cool $16.1 million. The purchase includes assets like 3D printers and a specialty tank welding machine. Rocket Lab's founder and CEO, Peter Beck, expressed excitement about the acquisition, stating that it would bolster their production capabilities, particularly for their larger Neutron rocket.
Meanwhile, Stratolaunch, known for its ambitious plans in hypersonic flight testing, walked away with Virgin Orbit's 747 jet after submitting a "stalking horse" bid of $17 million. Stratolaunch is developing its own airborne system called "Roc" and hopes to use it as a platform for testing hypersonic technologies.
Not to be outdone, Launcher, a subsidiary of Vast Space, snatched up Virgin Orbit's facility in Mojave, California, for a modest $2.7 million. The purchase also includes machinery, equipment, and inventory. Unfortunately, Launcher declined to comment on their plans for the facility.
As the dust settles on this explosive auction, Virgin Orbit's demise highlights the challenges faced by the company. Despite its successful missions and groundbreaking technologies, Virgin Orbit struggled to raise funds and faced slow execution, ultimately leading to its downfall.
While Virgin Orbit's employees and management express their gratitude to stakeholders and acknowledge the company's lasting impact on the space industry, the auction marks the end of an era for this once multibillion-dollar venture. The bankruptcy court is set to approve the sales in a hearing on Wednesday, signaling the final curtain call for Virgin Orbit.
It seems the rocket industry can be as volatile as the rockets themselves, with companies soaring to great heights one moment and crashing down to Earth the next. For now, we bid adieu to Virgin Orbit and eagerly await the next thrilling chapter in the space race.
In a move that echoes tech behemoths Google and Microsoft, Amazon Web Services (AWS), the cloud computing arm of Amazon, has announced its foray into the world of generative AI. However, unlike its competitors, AWS has a different target audience in mind, aiming to attract corporate customers rather than the general public. The company is expanding its array of artificial intelligence tools and providing access to custom-made chips specifically designed to optimize the efficiency and affordability of running AI software.
Adam Selipsky, CEO of Amazon Web Services, emphasized the nascent nature of generative AI, stating, "This whole area is really, really new, and it truly is day one in generative AI. There's going to be a lot of invention by a lot of different companies."
As the leading global provider of cloud computing services, AWS is following the trend set by other tech giants by unveiling its generative AI strategy. The major players in cloud computing have all recognized the transformative potential of generative AI in revolutionizing work and creativity, thanks to its impressive ability to generate sophisticated memos and computer code. This surge of interest has spurred AWS, Microsoft, and Google to integrate generative AI into their sales pitches, seeking to rekindle demand for their cooling cloud services.
Shishir Mehrotra, CEO of AI document startup Coda and an early tester of AWS's new AI products, expressed his excitement, drawing parallels between the current rush to adopt generative AI and the transition from computers to smartphones.
Each cloud infrastructure leader is carving out its own distinct path within the generative AI landscape. Microsoft has taken the lead by investing billions in OpenAI, the company behind ChatGPT, while Google has directed substantial funds, totaling hundreds of millions, into the development of another generative AI platform, Anthropic. Both companies have primarily focused on creating AI tools for consumer use.
In contrast, AWS has charted a different course. It has refrained from major investments in external AI firms or consumer-oriented tools. Instead, AWS positions itself as a neutral platform, catering to businesses seeking to incorporate generative AI features. By avoiding exclusive partnerships, AWS presents itself as the Switzerland of the cloud giants, accommodating the diverse needs of its customers and offering access to multiple large language models.
In summary, Amazon Web Services is joining the race in generative AI, capitalizing on the growing interest in this groundbreaking technology. While competitors Google and Microsoft have honed in on the general public, AWS has set its sights on the corporate realm. With an expanded suite of AI tools and efficient custom-made chips, AWS aims to solidify its position as the go-to platform for businesses embracing generative AI. The race is on among the cloud giants, each forging its own unique path to harness the vast potential of generative AI.
In a clash that could rival the epic battles between superheroes and supervillains, Gannett, the heavyweight champion of U.S. newspaper publishers, has thrown down the gauntlet and filed a civil lawsuit against Google and its parent company Alphabet. The accusation? Unlawfully monopolizing the advertising technology tools that publishers and advertisers rely on to trade online ad space.
According to the lawsuit, Google exerts its power to dictate how publishers sell their coveted ad slots, strong-arming them into offering more space to Google at discounted rates. This allegedly leaves publishers with reduced revenue, while Google's ad-tech competitors are left counting their losses as Google's pockets grow heavier.
This legal maneuver by Gannett comes hot on the heels of the U.S. Justice Department and eight states taking a swing at Google in January with their own antitrust lawsuit. Their claim? Google has an iron grip on the entire online advertising ecosystem, sidelining any potential competition.
But the fight doesn't end there. The European Union (EU) has also stepped into the ring, launching its own investigation into Google's digital ad dominance last year. And just last week, EU regulators landed a fresh blow on Google, slapping it with more antitrust charges. Their knockout punch? To break up Google's digital ad business by forcing it to divest certain parts.
This escalating showdown between the EU and Silicon Valley's giants mirrors similar actions taken by U.S. authorities in their attempts to dismantle Google's alleged stranglehold on the online advertising realm.
Mike Reed, Gannett's CEO, took to the pages of USA Today, owned by Gannett, to rally support for the cause. In an opinion piece, he voiced the company's mission to "restore fair competition in a digital advertising marketplace that Google has demolished." Reed asserts that Google's bid-rigging practices have left local news outlets reeling.
But the gloves come off on Google's side, with Dan Taylor, the vice president of Google Ads, refuting Gannett's claims. Taylor insists that publishers have a plethora of options when it comes to monetizing their content through advertising technology. He argues that publishers retain the lion's share of revenue when utilizing Google's tools and extols the virtues of Google's advertising products.
Gannett's lawsuit, filed in the U.S. District Court for the Southern District of New York, aims for an undisclosed amount of damages and injunctive relief. With an eye on a jury trial, Gannett is ready to go toe-to-toe with Google in the legal arena.
A new report has shed light on a concerning trend among Americans seeking auto loans, as the value of their vehicles decreases while loan amounts continue to rise. In the wake of pandemic-induced price hikes, vehicle values have taken a hit, leading many borrowers to find themselves in loans exceeding the worth of their cars.
According to a study released by TransUnion and J.D. Power on Tuesday, the loan-to-value ratios (LTVs) for used cars have soared from 104 in the first quarter of 2021 to 125 in the same period this year. This means that borrowers are securing loans that surpass the value of their vehicles by 125%.
While this surge in LTVs may allow consumers to afford used vehicles in the face of rising prices, it also raises concerns about potential delinquencies in the future. The study suggests that negative equity, where debt surpasses the value of the car, has become increasingly common, with some individuals finding themselves entering car dealerships already $10,000 underwater.
Satyan Merchant, a senior vice president at TransUnion, highlighted the impact of rising vehicle prices and overall inflation on consumers. As prices continue to climb and inflation remains high, individuals are compelled to start with higher-than-average LTV positions in order to afford used vehicles.
The situation is further exacerbated by the expectation of a continued decline in vehicle values. This presents a red flag for lenders, as prolonged negative equity could lead to higher risks and challenges in loan repayment.
Merchant emphasized the importance of closely monitoring this situation for lenders, particularly due to the potential for accelerated depreciation, which may result in borrowers having negative existing LTVs for longer periods. This development calls for heightened vigilance in the lending industry.
As Americans navigate the complexities of auto loans amidst shifting vehicle values, it remains crucial for borrowers and lenders alike to be mindful of these challenges. Awareness of loan-to-value ratios and careful assessment of the evolving market dynamics will be essential in making informed decisions and mitigating potential financial risks.
In a tragic incident at Montgomery Regional Airport on December 31, 2022, 34-year-old Courtney Edwards, a Piedmont Airlines ground service agent, lost her life after being pulled into a jet engine. The Occupational Safety and Health Administration (OSHA) recently concluded its investigation, revealing critical safety lapses that might have averted the fatal accident.
According to the OSHA report released on Wednesday, Piedmont Airlines, a subsidiary of American Airlines, could have prevented the incident through proper training and enforcement of safety procedures. The report indicates that had the ground crew followed required safety protocols, Edwards might have avoided the fatal injuries sustained from the spinning turbines.
OSHA Area Director Jose A. Gonzalez emphasized the importance of safety measures even in routine assignments. The National Transportation Safety Board (NTSB) had previously released preliminary findings, noting that safety protocols were not adhered to, potentially preventing harm to individuals near the aircraft.
Piedmont Airlines now faces $15,625 in proposed penalties as per federal statute. OSHA cited the airline for one serious violation, exposing ground crew workers to ingestion hazards during various tasks.
In response to the findings, Piedmont Airlines contested the citation, asserting that their current policies comply with Federal Aviation Administration (FAA) requirements. They emphasized their commitment to safety, stating that ongoing collaboration with unions ensures a secure working environment for their team members.
Edwards' tragic death has left a profound impact on her colleagues, friends, and the union representing her. The Communication Workers of America (CWA) set up a GoFundMe page to support Edwards' family, surpassing its $25,000 goal within days. Colleagues remember Edwards as a dedicated and motivated worker, raising concerns about the mental wellness of those who witnessed the accident.
As investigations continue, both OSHA and the FAA are closely examining the circumstances that led to this rare and unfortunate industrial accident. The incident serves as a sobering reminder of the critical importance of strict adherence to safety protocols in the aviation industry, where lapses can result in devastating consequences.
In a recent report by Verdad Advisers, the health of private companies owned by private equity and venture capital firms has raised concerns due to rising debt costs, compressed margins, and negative cash flow. Verdad Advisers' founder, Dan Rasmussen, describes the situation as "pretty scary," noting the deterioration in the margin, debt, and valuation landscape.
The report examines a subset of companies owned by private equity and venture capital firms that are publicly listed or have issued public debt. These companies exhibit characteristics such as sponsor ownership of at least 30 percent, going public since 2018, and being headquartered in North America. Among the 350 companies analyzed, with a combined market cap of $385 billion, around 40 percent were technology companies.
Verdad's analysis reveals that these companies trade at a significant premium to public markets on a GAAP basis. However, they require substantial pro-forma adjustments to achieve comparability. This subset of companies eligible for going public skews towards the higher end of successful outcomes, but their underlying financials paint a different picture.
While the analyzed companies have stronger sales compared to S&P 500 companies, their EBITDA margins have been notably lower, with significant margin compression over the past few years. The research also highlights that 55 percent of the private equity-backed firms had negative free cash flow in the previous year, and 67 percent accumulated additional debt over the past 12 months.
The report indicates that the median leverage for companies with net debt stands at 8.8, corresponding to a Triple-C credit rating, significantly higher than the median leverage for S&P 500 companies at 1.7. Interest costs devour a substantial portion of EBITDA for private equity and venture capital firms, with 43 percent going towards interest payments, compared to 7 percent for S&P 500 companies.
The increase in debt levels, coupled with potentially inevitable multiple compression on exit, poses challenges for these companies. Rasmussen and Verdad Advisers suggest that the companies analyzed are likely among the best offerings from private equity. Despite these concerns, private equity remains a favored asset class for sophisticated investors, with some endowments and family offices approaching a 40 percent allocation.
As private equity's popularity has been fueled by strong trailing returns, low volatility, and a tech-focused approach, the landscape is evolving. Rasmussen points out that valuations have soared due to the influx of capital, particularly through sponsor-to-sponsor deals. However, the current situation suggests that adjustments are necessary.
The Verdad Advisers report underscores the financial challenges faced by private companies in private equity and venture capital, serving as a reminder of the evolving dynamics within this asset class.
In a world dominated by online retail giants, one startup has emerged as a beacon of hope for independent bookstores. Bookshop.org, founded by Andy Hunter, has revolutionized the way small bookshops can thrive in the digital age. This is the story of how a former magazine editor turned entrepreneur created a platform that defied expectations and provided a lifeline for struggling businesses.
It all started with a moment of inspiration during a work trip in 2018. Hunter, the former publisher of Catapult, found himself pondering the idea of ecommerce as an opportunity rather than a threat to independent bookstores. Motivated by a conversation with a board member of the American Booksellers Association, Hunter envisioned a platform that would empower these stores to compete with retail giants like Amazon.
Hunter's vision became a reality with the launch of Bookshop.org in January 2020. The timing couldn't have been more fortuitous, as the COVID-19 pandemic forced many brick-and-mortar stores to close their doors. Bookshop.org offered a lifeline, enabling these businesses to quickly set up digital storefronts and fulfill orders through a partnership with wholesaler Ingram.
The response was astounding. Bookshop.org surpassed all expectations, reaching sales milestones that Hunter never anticipated. The platform became a symbol of hope for struggling bookstores and a way for customers to support local businesses during a time of crisis. Bookshop.org's profit-sharing model further cemented its appeal, as stores received a share of the sales generated through their virtual storefronts.
While Bookshop.org has faced some criticism, with concerns raised about diverting sales away from independent stores, Hunter remains committed to his mission. He sees Bookshop.org as a necessary intermediary, a way to counter the dominance of Amazon while still prioritizing direct purchases from local bookshops. With Bookshop.org's success in the book industry, Hunter envisions expanding the platform to support other small businesses in the future.
As Bookshop.org continues to grow, Hunter aims to introduce new features, such as audiobooks and ebooks. Despite the challenges posed by the dominant players in the market, Hunter's optimism is unwavering. He believes in the power of community and the importance of preserving independent businesses. With each new milestone and success story, Bookshop.org proves that a small startup can make a big difference in the world of ecommerce.
Bookshop.org is not just a platform; it's a symbol of hope for independent bookstores everywhere. Through the dedication and vision of Andy Hunter, this startup has become a force for positive change in the industry, reminding us all of the value of supporting local businesses and fostering a sense of community in the digital age.
Hyundai, the Korean automaker, remains undeterred by recent challenges as it reiterates its commitment to the transition to electric vehicles (EVs) at its investor day in Seoul. Despite facing investigations regarding issues with its Ioniq 5 model in the US, the company remains focused on its long-term strategy, known as the "Hyundai Motor Way." As part of this vision, Hyundai plans to invest $85.41 billion dollars over the next decade, with a significant portion of 35.8 trillion dollars allocated for electrification.
The National Highway Traffic Safety Administration (NHTSA) recently highlighted concerns raised by several 2022 model-year Hyundai Ioniq 5 owners. These customers reported instances of complete or partial loss of propulsive power, often accompanied by a loud popping noise and warning displayed on the dashboard. The NHTSA initiated an investigation into the matter on June 8, following a flood of similar complaints on social media platforms such as Twitter, Facebook, and Reddit.
According to Hyundai, the incidents are related to the Integrated Charging Control Unit (ICCU), responsible for charging high voltage and spare batteries in the vehicle. Excessive current within the unit can damage transistors, impairing the ability to recharge the 12V battery. While no crashes, fires, injuries, or fatalities have been reported in connection with these incidents, the NHTSA is actively examining the scope and severity of the issue.
Despite the temporary setbacks in the US market, Hyundai's commitment to electric mobility remains steadfast. With a substantial investment in electrification and a target of 2 million EV sales by the end of the decade, the company is determined to overcome the challenges and continue its journey towards a sustainable automotive future.