|The Hustle||Sponsored by||
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.
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
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
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
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.”|
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).
Boost your team’s productivity with the #1 CRM. Scoot over to their site for a Quip demo today.
|up and to the right||by||
We’ve partnered with Cole Haan to bring you a weekly roundup of the most important trends in business, tech, and culture to keep you trending in the right direction.
The results are in… y’all are some crazy travelers
It’s been exactly 15 company lunches since we asked you, “What’s your go-to travel hack?”
No doubt, the suspense has been eating away at you like Gordon the Engineer with a hot Rueben sandwich.
Well, wait no more!
After sifting through more than 150 responses, we’ve distilled our readers’ collective business traveling prowess into 13 mid-flight snack-able hacks.
May we present: The Hustle’s Ultimate Travel Hack Collection.
|Feel My Needs, Gorgon City remix. Today is techno Tuesday from the mind of Jay Warner…|
|[%Count%]||SHARE THE HUSTLE|
|YOUR UNIQUE URL|
| Brad “Entertainment” Wolverton
Director of Sportsmanship
|Join our Instagram community →|