A $3.6B Indian jewelry chain tripled in size in 6 years -- and lost it all in the last few months
PC Jeweller, a 13-year-old jewelry company from New Delhi, lost 77% of its market value since Jan. 19 -- about $2.8B off of a $3.6B valuation at the beginning of the Q -- after a series of questionable trades sent shareholder confidence spiraling.
Now, PCJ is battling rumors of the arrest of its managing director, Balram Garg, while desperately buying back shares to keep its stock from crashing further.
They started as the “Sunglass Hut” of India…
And became nearly 3x bigger than Warby Parker.
PCJ launched in ’05 as a single shop in Delhi’s popular market, Karol Bagh. Since then, the company’s brother-founders Pramod Chand Gupta and Balram Garg have grown it into a 90 outlet, 70 city operation -- nearly tripling revenue since 2012 to about $1.2B last year.
But now, thanks to plummeting share prices, their necklace empire is back in “Hut” territory once again...
So what triggered the drop?
According to Quartz, the trouble started this year when a Mumbai tech company, Vakrangee, bought shares in PCJ without listing who they bought them from.
Vakrangee was flagged for investigation by the Securities and Exchange Board of India (SEBI), bringing PCJ into the fray by association (though PCJ says Vakrangee no longer holds stake in the company) and sending shares tanking.
Then after shareholders demanded more transparency last month, PCJ disclosed that promoter Padam Chand Gupta “gifted” some of his shares to family members through “off-market transactions.”
To cap it all off, last week reports surfaced of raids at multiple PCJ locations and of Garg’s arrest.
What does PCJ have to say for themselves?
As they wrote in their April letter to shareholders, PCJ “is not aware of reason of sudden decrease in prices of equity share.”
AKA, who’s to say, really.
“There is nothing fundamentally wrong with the company… Everything is going well,” PCJ CFO Sanjeev Bhatia told Livemint. Meanwhile, Garg told Zhee the rumors of the arrest are totally baseless and that he has no idea where they’re coming from.
So, either there’s some really shady biz going on behind the scenes at PCJ -- or, as Bhatia suggests, “someone is just playing around.”
2 out of 3 of Spotify’s major record label shareholders cash in their stock for over $1B
Last week, Sony, who easily held the biggest stake in Spotify, sold about half its shares for close to $750m. Then, yesterday, Warner Music Group followed suit -- selling off 75% of their shares, and netting close to $400m.
So what the heck happened?
“It’s not you, it’s me”
Spotify went public last month, at a valuation of $30B, but in its first-quarter as a publicly traded company, their earnings hit well below investor expectations, causing their shares to fall more than 9%, shaving $3B off their current valuation.
But, according to Warner’s CEO, Steve Cooper, their decision to pull out is no indication of how they view Spotify’s future, saying that they are still heavily invested in the company’s success.
“We’re a music company and not, by our nature, long-term holders of publicly traded equity,” Cooper explained.
Didn’t know those two things were mutually exclusive
For the last decade, the music industry has been in a tailspin, relegating mid- to low-level artists like Lil’ Bow Wow to pro-bono shows at your cousin’s bar mitzvah.
(It’s still great “exposure,” right?)
On the bright side, Spotify royalty checks have boosted industry sales the last 3 years, and both Warner Music Group and Sony claim they plan to distribute some of the proceeds from their haul to musicians and songwriters.
The downside: Neither of them have explained how they plan on doing that -- let’s hope Beyonce gives hers to Bow Wow.
Musk v. Buffett: Candy clash exposes differences in investment philosophy
After Elon Musk badmouthed Warren Buffett’s investment theory of “moats,” the babbling billionaires exchanged remote jabs in a public fight about candy this past week.
The playground boxing match showcased two big egos in opposite corners of the ring -- and their fundamental differences in investment style.
WTF is a moat and why does Elon think it’s lame?
An economic moat is the competitive advantage that separates a particular business from the pack, a term popularized by Buffett -- and a requirement for any business that wants his investment.
“Moats are lame,” Elon told investors on an earnings call last week, “What matters is the pace of innovation.”
Warren B -- owner of See’s Candies -- wouldn’t take Musk’s mockery, saying “Elon may turn things upside down in certain areas [but] I don’t think he’d want to take us on in candy.”
Musk later unleashed a Tweet-storm sarcastically describing plans to “build a moat & fill it w candy… Berkshire Hathaway kryptonite.”
Two billionaires, polar opposite investment strategies
Buffett invests in stable, near-monopolies over decades (4, in the case of See’s) -- stark contrast to Musk’s investment in rapid-fire innovation to disrupt established industries.
The bickering between the Obi-Wan-like Berkshire Hathaway investor and the upstart Tesla founder highlights a broader debate about the merits of risky short-term innovation vs. oligopolistic long-term competitive advantage.
But by the close of trading yesterday, both billionaires were doin’ alright -- Tesla was up 2.95% and Berkshire Hathaway was up 1.03%.
Fear of ‘looking replaceable’ shrinks employee vacation time -- and the economy
A recent study by market research firm GfK shows that workaholic American employees didn’t use 705m of their vacation days last year -- collectively leaving $62.2B in benefits on the table.
While the amount of vacation time used by Americans is inching its way back from a rock bottom 16 days in 2014, fear of looking like slackers makes workers more grumpy and less efficient -- and also less likely to be promoted or get a raise.
Americans do worse work for longer so it looks like they give a sh*t
Despite this slow increase, 52% of Americans still don’t use all of their vacation -- overwhelmingly due to concerns they will “look replaceable.”
Not only are fewer non-vacationers (46%) happy at work than vacationers (59%) -- they also don’t do as well, resulting in an 8% lower chance of promotion and 5% lower chance of a raise.
The US hospitality industry needs you to drink a pina colada
But last year, those 705m unused days of vacation bliss (and decreased spending on on tiki-themed drinks) cost the US economy $255B and 1.9m jobs in the tourism and hospitality industry.
So don’t wait -- time to head to the beach and drink a Corona in the name of productivity.
Save $100 on Hustle Con -- now with 5 new speakers
Let’s cut to the chase: Hustle Con ticket prices go up on May 10. That means you have 2 days to put your money where your entrepreneurial mouth is before you flush a Franklin down the toilet.
Still on the fence? We just added 5 new founders to our lineup:
Justin Kan: Justin co-founded Twitch, Justin.tv, Exec, Kiko, and SocialCam (to name a few). Twitch - arguably Justin’s most well-known company - sold to Amazon for $970m, and has 100m monthly users.
Max Mullen: Max co-founded Instacart, the on-demand delivery company that completely changed the grocery industry. Over 5 years, Max helped grow it to a $4.2B valuation.
Kirsten Tobey: In 2006, Kirsten founded Revolution Foods to provide a healthy meal to every kid in the school system. Today, they serve 3m meals per week to schools in 30 cities and bring in $130m in revenue.
Sridhar Vembu: Sridhar founded software company Zoho, and grew the team to 5k employees, 30m users, and billions of dollars in revenue -- almost completely bootstrapped.
Kyle Taylor: Kyle is the founder and CEO of The Penny Hoarder, a profitable media company with 12-17m readers per month. They grew to $37m in annual revenue completely bootstrapped -- all without a single banner ad.
Each of these game-changers started with an idea, and turned it into a wildly successful business, while playing by their own rules.
See them up close and personal -- and save $100 -- grab your ticket to Hustle Con (on June 22) before prices go up.
The effort to clean up the atmosphere just got a boost. A trendy, new luxury condo unit in Manhattan’s SoHo neighborhood will now purify the air better than 500 trees, thanks to an eco-friendly paint job.
The building is sprayed with a coating called Pureti, which works like a giant air scrubber. Pureti breaks down contaminants in the air using a photocatalytic process turning pollutants into harmless minerals. [Quartzy]
Projectors have been around for awhile now, but the latest from ViewSonic blows its dusty ancestors off the wall -- literally. The new ViewSonic PX747-4K packs 4k quality resolution with 3500 lumens of light-blasting power for just $1,299.99 -- far lower than the competition.
Meaning day or night, you get an image so sharp, it’s like you can reach out and touch Bernard’s glasses (shoutout to all our Westworld fans out there). The PX747-4K turns any wall into a personal home theater. [ViewSonic]
The beleaguered internet company Answers.com recently announced it is shutting down its popular Answers forum, deleting user profiles and logins.
According to the company, the cost to maintain profiles and police user-content became too much to bear (Answer.com’s holding company filed for bankruptcy in March). But don’t worry, all those answers to juicy Qs like, “Why does Yoda talk backwards?” will be archived.
See, REITs come in two flavors: public and private. Public REITs can be purchased by anyone, but private REITs... You gotta know somebody.
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