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Old mister buffett sat on his tuffet…

Today, Pinterest goes low while Chuck E. Cheese re-IPOs, but first...

Today, Pinterest goes low while Chuck E. Cheese re-IPOs, but first…
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Mobile home investing is hot for Warren Buffett, but homeowners get burned 

Recently, on Last Week Tonight, John Oliver explained how investors prey on owners of mobile homes — which, as it turns out, cost a hell of a lot more than a tank of gas to move.

These tactics range from offering high-interest loans to buying the land underneath the houses, only to hike the rents on tenants.

Oliver also went on to mention that this is a classic sales hole that Warren Buffett’s company Clayton Homes — the biggest mobile home manufacturer in the US — has been perfecting for years, paving the way for other heartless hopefuls to do the same. 

Trailer parks are a big ol’ business

In 2015, more than 20m people lived in trailer parks — and if there’s whitespace in a market, the Oracle of Omaha’s going to find it. 

Through Clayton Homes, Buffett has helped sell low-income Americans the dream of ownership since 2003 — and his investment company, Berkshire Hathaway, reaps the rewards (BH also owns the loan company that Clayton urges its buyers to go through).  

But, according to The Seattle Times, buyers claim that Clayton relies on predatory sales practices, exorbitant fees, and interest rates that cement buyers into loans they can’t afford, in homes that are almost impossible to sell or refinance.

And now, people like Frank Rolfe exist…

The Oliver segment focused mainly on Frank Rolfe, whose “Mobile Home University” teaches new scumbags, young and old, how to rip people off once they sign on the mobile dotted line — just like Clayton Homes.

The difference is, Rolfe is unabashed. He details best practices for ripping off buyers to his students, likening a mobile home park to “a Waffle House where customers are chained to their booths” — practices that Clayton Homes and Warren Buffett both vehemently deny.

Shill-ionaire of the people

Clayton stayed profitable through the financial crisis. In 2015, Clayton grabbed a record $700m in earnings, while foreclosing on over 8k homes

Buffett has long been viewed as a corporate hero. The more he complains about his secretary having to pay higher income tax than he does, the more people view Big B as some rich do-gooder. 

But Clayton homes’ manipulative business model, which Buffett immediately saw dollar signs in, contradicts many of the ideas of fairness for which Buffett is known.

Buck Fuffett
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Pinterest will go public at a valuation lower than its last funding round

Pinterest, the picture-based social sharing website beloved among scrapbookers and gardeners everywhere, priced its long-awaited IPO at a price range of $15-$17 per share with plans to begin trading next week.

Even at the high end of that price range, the company will go public at a valuation of $11.3B — a full $1B less than its last private valuation.

Pint-sized investor interest

Pinterest has raised a whopping $1.5B from investors since it launched in 2009. During its last several funding rounds (in 2015 and 2017), Pinterest was privately valued at $12.3B

Because Pinterest is poised to enter public markets at a valuation far lower than its most recent private valuations, some of Pinterest’s most recent private investors aren’t going to see unexpectedly low profits, but actual losses.

The runt of the unicorn litter

Pinterest’s low pricing is raising some questions about the prospects of other thin-margin companies that plan to IPO, like Airbnb, Uber, and Slack. 

But undercorns don’t necessarily underperform, especially in the long run. Square went public at $2.9B — less than half its $6B private market valuation — but got the last laugh when its market cap shot to $31B.

Although Pinterest is unprofitable like peers Uber and Lyft, it is losing far less money: Last year, Lyft — whose recent IPO involved a roller-coaster drop and then recovery — lost $911.3m compared to Pinterest’s $63m.

» You can’t Pin ‘em all

Chuck E. Cheese will take its pizzas back to public markets

Chuck E. Cheese is cashing in all its tickets in (another) IPO. The video-game-pizza-parlor chain, private since it was acquired by Apollo Global management 5 years ago for $1.3B, will be the first “new” restaurant chain to list publicly in the US since 2015.

For people whose idea of heaven includes gigantic animatronic mice, pizza grease-lubricated ball pits, and unlimited B-rate video games, Chuck E. Cheese’s has served up a slice of heaven for 42 years. 

But things haven’t always gone smoothly for Chuck…

It ain’t easy bein’ Cheese E.

Atari founder Nolan Bushnell created “Pizza Time Theatre” in 1977 to make Pong popular with kids, choosing Chuck only after “Rick Rat” got shot down. Cheese’s grew with the gaming industry, going public in ’81. 

But 2 years later Chuck — who, thanks to the video game crash of ’83 (AKA the Atari shock), was down to his last buck — declared bankruptcy.

Chuck sold to competitor Showbiz, which ran the cheesy chain as CEC Entertainment until 2014, when it was acquired.

A familiar furry face back on the market

Under Apollo’s guidance, Chuck cleaned up his mouse-houser, replacing tokens with cards and adding menu items including coffee and booze.

Queso Holdings — which owns CEC Entertainment’s 600 global Chuck E. Cheese’s — will merge with British private equity spinoff Leo Holdings (Apollo, of course, keeps the largest 51% slice of the pie for itself). 

Sales in the 4th quarter of last year grew 3.3% and were expected to grow another 7.7% in the first quarter of this year. The new Chuck will trade on the NYSE under the ticker “CEC” in the 2nd quarter at an expected valuation of $1.4B.

» Good Luck Chuck

P2P lending startup says you’re more than your credit score

Upstart, the SF-based startup that leverages AI to automate the loan process, has raised $50m, VentureBeat reports

According to company founder and ex-Goog Dave Girouard, the traditional, oversimplified FICO-based loan model leads to wasted viable lending opportunities, particularly for younger applicants.

FICO scores are so last year 

Upstart’s D2C loan algorithm utilizes AI and Machine Learning (AI-ML) to analyze more comprehensive data inputs (e.g., work history, education, area of study) and identify loan recipients, sizing and rates. Most of those recipients are college grads, ages 28-35.

The startup also uses AI for fraud monitoring and automated approval processes (…Tossing out credit scores AND the need for human contact? They clearly know their millennial target base).

LaaS(t) but not least…. on the lender side, banks and credit unions can utilize Powered by Upstart, a Lending-as-a-Service platform, to apply Upstart’s risk modeling and automation to their own personalized, unsecured installment lending programs. 

Peer-to-Peer lending is trending

Upstart isn’t alone in the P2P market: Competition is growing as others, e.g., Funding Circle and Prosper, try to rule over all the lend.

But Upstart is feelin’ pretty good: Since its 2012 inception, the company has originated $3.3B in loans and claims loss rates of less than half of those of other platforms.

According to VB, they have been profitable since 2018 and plan to continue expanding their partnerships and service offerings.

» You had me at “eliminating human contact.”
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If Salesforce had a sidekick, it’d look a lot like Quip

If you’ve spent any time in Salesforce, you know just how powerful of a tool it is. 

But you’re also probably aware that it can’t do everything you’d like it to. 

Quip changes that by giving you and your team the real-time document collaboration you’ve been begging for — all within Salesforce. 

With Quip, it’s all in the document

Quip allows your sales team to collaborate on account plans, pipeline reports, customer notes and more from inside Salesforce.

Create dynamic documents, spreadsheets, and presentations with the context your team needs to close deals faster and better serve clients without ever leaving Salesforce. 

Think of Quip as your team’s docs HQ in Salesforce where they can finally work together, and close deals faster.

Add calendars, embed Box folders, showcase project trackers — do practically anything — inside a Quip doc, eliminating useless meetings, tab switching, and the dreaded “document spread” (AKA final_pitch_seriouslyfinal_v2_draft). 

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