death-watch
Schwarzenegger Wants to Terminate His Tesla Roadster
Owen Thomas · 03/25/09 11:43AMThe End of Second Life
Owen Thomas · 02/22/09 12:00PMWhy Tesla's Elon Musk Could Be the New Preston Tucker
Owen Thomas · 01/30/09 03:47PMWeinstein Co. Is Now 25% Off
Gabriel Snyder · 12/10/08 05:25PMSharks Circling, the Weinstein Co. Starts to Shrink
Gabriel Snyder · 11/21/08 06:10PMWhenever he's had a glaring problem in his business, Harvey Weinstein — legendary manipulator of the press — has always been a master at deflecting attention away: No Oscars recently? Just look at how much money the lowbrow genre films his brother Bob have been raking in! No big genre successes? Well, look at our home video business! The home video business is struggling? Well, we've got an Oscar film coming up! The cycle can be repeated over and over, but financial facts always trump spin. And today, the Weinstein Co. laid off 24 of its employees, 11% of its total staff, according to the New York Post, in what will only provide more chum in the water for those not-so-quietly rooting for the final downfall of the Weinsteins.The reason cited today was, of course, "the economy." But all of the bright spots the Weinsteins once pointed to at their company are dimming. The biggest potential break-out movie on this year's slate was Zack and Miri Make a Porno starring Seth Rogen and Elizabeth Banks. As a Kevin Smith film, it's done fine since opening over Halloween weekend, with just over $27 million at the box office. But that's nowhere near the kind of return they'll need to convince tight-fisted investors to pump more money into TWC. Their cash-generating Project Runway is tied up in a nasty law suit that will keep it from returning to the air any time soon. And the boring side of the business, the 70% stake in straight-to-video distribution arm Genius Products, is now literally a penny stock, closing on Friday at 4 cents per share, valuing the whole operation, which they once touted as a potential billion-dollar enterprise, at less than $3 million. The Weinsteins are running out of lifelines. But they still provide colorful stories. On Wednesday, some people at the Weinstein Co. were told to clean out their offices because a "special guest" would be coming through on Friday. Those same people learned this afternoon that it was just a ruse to speed their exit when they were told they were getting the ax.
How Ashton Kutcher killed a startup guy's Hollywood dream
Owen Thomas · 11/21/08 02:20PMIt was a fantasy left over from the last boom: Hire a movie star to pitch your startup, and the dusting of tinsel will turbocharge sales. Those William Shatner ads sold plane tickets for Priceline, right? But the career of hard-partying entrepreneur Andrew Frame did not follow that script. We hear he was just fired as CEO of the Internet-phone startup he cofounded, Ooma. His most notable decision, hiring actor Ashton Kutcher as "creative director," did not pan out; Kutcher made a few incomprehensible videos, and then faded from the scene.Frame, a high-school dropout who'd nevertheless managed to get a job at Cisco, the networking-equipment maker, could have been at least a TV star himself; he looks eerily like Will Arnett's G.O.B. character on Arrested Development. And Ooma's products, the Hub and the Scout, are pleasant enough to look at, too. As if there wasn't enough of a Hollywood connection, Frame lied about the Palo Alto-based startup's age.
New York Times Earnings News Is Nothing But Bad News
Hamilton Nolan · 11/20/08 05:02PMThe Dow Jones Industrial Average hit a five-year low today, closing down nearly 450 points. And the New York Times Co. had an even worse day. The company's stock dove almost 10%, lower than it's been in decades. And just after the close of the markets came the payoff: the company is cutting its dividend to six cents per share, down from 23 cents last quarter. How bad is it? Very bad. How long can the company last before calling bankruptcy if things keep going like this? We're putting the question to you. In one sense, it's wise for the company to cut the dividend, because it needs to conserve all the cash it can get. But it's pretty apocalyptic for its stock, because it just makes it that much more unattractive to investors. The company also released its October revenues just minutes ago. How are those? Horrible! Total revenues are down 9.4% from last year, and ad revenues are down more than 16%.
Glam Media making publishers wait four months for cash
Owen Thomas · 11/04/08 06:20PMWhen will Samir Arora admit that Glam Media, his online ad network, is running out of money? Glam buys up ad space on websites and resells it to advertisers, as well as operating a few token websites itself. But it has overpaid for much of that space, and revenues are running dangerously short of projections. Now, Glam is delaying its payments to partners by up to 120 days, claiming that the move is necessary because advertisers are slowing their payments to Glam. Which is utter nonsense.A well-capitalized ad broker would be able to pay its publishers promptly; it's part of the reason why such middlemen take a big cut of advertisers' payments. The only sensible reason why Glam can't pay Web publishers promptly is because it no longer has the capital to float its accounts receivable, despite raising $85 million earlier this year. I'm sure Arora will deny that he's running low on money — in which case he will be tacitly admitting that he's stiffing his partners.
The martyr of Tesla Motors
Owen Thomas · 11/04/08 12:40PMHaving laid off 75-some employees and run his electric carmaker's cash balance down to $9 million, what is Tesla Motors CEO Elon Musk busying himself with? Conducting a witch hunt to find who leaked Tesla's financials to Valleywag. The Truth About Cars has published an email it claims is from Musk, which includes a letter apology from R&D director Peng Zhou. The only thing that's curious: Our tipster said he'd been at Tesla for four years. Zhou has only been there for two years. In Musk's haste to find someone to blame, did he extract a forced confession from the wrong man?
Tesla to borrow $40 million from investors
Owen Thomas · 11/03/08 12:40PMThe slow-motion crash of Tesla Motors continues. Last week, an insider revealed the electric-car maker, once the best hope of Silicon Valley's nascent clean-transportation industry, had only $9 million in the bank. Now, Elon Musk, the investor who recently deposed the company's CEO, claims the company has commitments for another $40 million in financing from some of its current investors, a group which includes Google cofounders Larry Page and Sergey Brin and former eBay president Jeff Skoll. But that money is debt, not equity.Current Tesla shareholders have 30 days to choose, through a process known as a rights offering, whether to fund the debt, which is convertible, at a later round of financing, to shares. Tesla thereby avoids setting a new, presumably lower valuation for the company — almost a certainty if it had issued new shares, given Tesla's straitened financial condition. But the reality remains: Having raised $146 million in venture capital and tens of millions of dollars more from customers putting down deposits on the $109,000 Roadster, Tesla is now sinking into debt. In January, it may obtain a $200 million loan guarantee from the Department of Energy — meaning that it will be borrowing more cash. $9 million in the bank now, with $240 million in debt to come: Tesla will soon resemble, in miniature, the stumbling Detroit giants it hoped to overturn.
Tesla Motors has $9 million in the bank, may not deliver cars
Owen Thomas · 10/30/08 07:00PMThe Valley's hottest electric-car maker is running on fumes. Tesla Motors, the brightest hope of Silicon Valley's nascent clean-automotive industry, has only $9 million in the bank, a longtime employee tells us. The company, which recently laid off dozens of employees and announced the closing of its Detroit office, called an all-hands meeting yesterday evening to inform employees of its financial state. What makes the company's low cash balance especially scary, our tipster says, is that the company has taken "multiple tens of millions" of dollars in deposits from customers — anywhere from $5,000 to $60,000 per vehicle — and has only delivered 50 of them. The obvious conclusion: Having already spent its customers' deposits, it may run out of money before it delivers the cars they have paid for. Here's the Tesla insider's report:
The Media Gods Are Angry
Sheila · 10/24/08 03:12PMWe called it the Great Magazine Die-Off, but it is the work of an angry Media God. We should take this time to reflect what we have done to irritate him so, for He is smiting us, laying off people in great multitudes, and killing magazines. He's about to pair us up two-by-two and load us all onto a big boat (the seas of the Internet?), so that he can flood the media and destroy it in order to save it. Radar was the sacrificial lamb, and we hope that He accepted that sacrifice—but let's be honest, CosmoGirl and 02138 deserved to die. (Was it advertorials? Is He mad about advertorials?) We can only hope that the great flood that is now upon us will wash away the media-sin, and desperately try to cling to the ark. After 150 days, we'll wait for a dove to return with an olive branch in its beak. We're hoping the bird won't have the face of Arianna Huffington—or the mark of the Daily Beast.
LiveUniverse struggling to pay employees, clients
Jackson West · 10/02/08 10:40AMIt's only a matter of a few hundred dollars, but after high acquisitive LiveUniverse acquired affiliate movie marketer Peerflix, blogger Eric D. Snider stopped receiving the until-then-regular checks. Which happened around the exact same time that we got a tip — in late August — that LiveUniverse didn't have enough cash to pay employees on payday. And it's just the latest in a string of bad signs.Besides Peerflix, the company started by jilted MySpacer Brad Greenspan has also purchased struggling companies PageFlakes and Revver in the last year, and Greenspan made a personal investment in Flurl, but was turned away by JumpTV. All that wheeling and dealing while not paying attention to basic operations like payroll? Flashy products and technology that may or may not actually exist? "Out of touch" sounds about right. Greenspan and friends will probably just blame the market as management shorts employees, since that's all the rage these days. But this looks a lot like a textbook case of "excess and lack of self-discipline" to me. Who may end up the winner in all this? The Hollywood Hills Cat Burglar, who seems to have gotten away from Greenspan's mess just in time. (Photo by Getty/Alberto E. Rodriguez)
Uber.com firesale to feature cheap, lightly used Aeron chairs
Jackson West · 10/02/08 07:00AMAnd so it begins — like a bad flashback to the year 2000, word comes from a tipster that while investors have pulled the plug on social networking startup Uber the site and service may stay online thanks to some free hosting help from ShareNow. But that doesn't mean there will be any employees around minding the store. There will be nothing to mind, since the company is planning to sell off all its physical assets as a lot, according to a tipster citing a rant from a soon-to-be-ex-employee. The bitterness at what's left of the company is already starting to set in, with particular scorn for co-founder and company president Glenn Kaino who was described as "a real bastard," to paraphrase the disgruntled minion. So while it may not exactly be a chance to save Uber, it may well be a chance to get that deal on a piece of Hermann Miller office furniture if you missed your chance in the dot-bomb. Who'd a thunk a site intended for jetset hipsters would end up a bargain-hunter's dream?
Uber.com is too legit to quit
Alaska Miller · 09/30/08 06:20PMWith already pissed off VCs demanding their money back, Uber.com — a social network for hipsters — is doing anything but. Uber.com first called it quits last Friday but the LA-based website is now begging its users to spam its link on Facebook and MySpace in an effort to save it. A cunning strategy to let as many people know how small of a failure you are. [TechNews.LA]
Sneaky ad startup Jellycloud deflates, taking $50 million-plus with it
Owen Thomas · 09/30/08 12:40PMThe online-ad network market is clogged with startups; most are bound to fail. But no death may be greeted with more joy than Jellycloud, the latest incarnation of Gator, a startup whose software was caught spying on users. A tipster tells us Jellycloud, with 36 employees, went under this weekend, with liquidators repossessing their furniture. A hard death, after a questionable birth.Gator had changed its name to Claria, and raised some $40 million to launch a personalized homepage which never caught on. In the sneakiest move of all, it then raised $11.5 million under a new company name, JellyCloud, with the same set of executives as Claria — Scott Vandevelde and Scott Eagle among them. Was Jellycloud just Claria reborn? It's now a moot point, if our tipster's report is accurate. And a painful mistake for US Venture Partners, SoftBank, Sand Hill Capital and Crosslink Capital — who have managed to lose $11.5 million in just five months.
Harvey Weinstein Just Lost A $1 Million Bet
Ryan Tate · 09/29/08 11:15PMWhat was Harvey Weinstein thinking? The movie mogul is already being dissed by once-pliant reporters and magazines, and struggling to right his company and other investments. Now he's given more ammunition to the haters and socked his pocketbook, all in one fast miscalculation. The Weinstein Company chief reportedly told the Post's Page Six he doubted the authenticity of an email quoted by aggressive Hollywood blogger Nikki Finke, and offered $1 million for charity if Finke could produce the original. The email, from movie producer Scott Rudin, concerned a feud over the release date of Kate Winslet vehicle The Reader. Page Six called Finke tonight and guess what? She has the email, and has already posted it. UPDATE: Rudin told Page Six Finke is lying. UPDATE 2: Rudin admits he lied to Page Six! See below.
How long will Randy Falco stay at AOL?
Owen Thomas · 09/22/08 03:20PMLet us say it, since every other writer seems too kind: As CEO of AOL, Randy Falco is an utter embarrassment. Silicon Alley Insider recounts his perplexing performance in front of a crowd of media executives gathered for Advertising Week in New York. "Radio was supposed to die 50 years ago," Falco said. "The reason radio is still around is because of mobile. The reason broadcast will still be around 50 years from now is because of mobile. All of our businesses up here will continue to grow because of video applications on mobile." What?It's as if he thought that playing a game of buzzword bingo would masquerade as strategic thought. A television salesman by trade, Falco was plucked by Time Warner CEO Jeff Bewkes from NBC Universal to replace Jon Miller, in a universally derided move. A commonly held belief among insiders: Falco and Bewkes thought AOL would be sold off by now, with Falco moving on to some role at Time Warner's film and television properties. AOL has continued to embarrass. And so has Falco. The only question is which exit will come first.
Barry Diller's finance site: "Completely pointless"
Owen Thomas · 09/22/08 10:20AMFiLife, a personal-finance site backed by IAC and the Wall Street Journal, is struggling, according to one ex-employee we eavesdropped on at the City Bakery, a coffeehouse in Manhattan's Flatiron neighborhood, as she interviewed for a new job. "The business model completely changed," she said. "It used to be personal finance for people in their 20s and 30s. Now it's just completely pointless." An embittered writer? Perhaps. FiLife hired a batch of journalists, only to switch gears shortly before launch and realize that the Web didn't need another content site. But their replacement — a set of automated tools to evaluate one's place in the financial pecking order — do seem pointless. The site only attracts 31,500 users a month. In this regard, FiLife is utterly typical — of both its backer and its genre.IAC CEO Barry Diller has a ghastly track record of launching projects in-house; almost every vaguely promising Internet property he owns, he bought from someone else: Ask.com, Match.com, CitySearch, and so on. And personal finance sites are deadly. In trying to break the mold, FiLife managed to be even more condescending than most. Its introduction: