Shake Shack returns the corona cash

April 21, 2020

April 21, 2020
The Hustle

How on Earth do oil prices go negative? The quarantine era checked off another alarming first yesterday, when US oil futures actually tanked below $0. Here’s a very quick explanation:

  • Oil futures contracts are traded by the month. 
  • May deliveries of West Texas Intermediate, a grade of crude that serves as the US benchmark, went into the red.
  • The price plunged because the May contract expires today, and demand has fallen off a cliff.
  • June futures were still in the black, hovering ~$21 per barrel.

Before you get any ideas, take it from the experts at GasBuddy:

Corona Cash

Shake Shack sends its coronavirus relief loan back to the kitchen

Last week, we learned that a big burger chain and a meaty brand of steakhouses had nabbed some of the government’s coronavirus relief money for small businesses. 

To critics, the revelations were red meat — shouldn’t the money go to businesses that are actually, y’know, small?

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So on Monday, the bougie bovine specialists at Shake Shack changed their minds.

Don’t beef with us

The company, which operates ~189 restaurants in the US and reported almost $600m in revenue last year, received $10m of the $349B in the Small Business Administration’s coronavirus relief funds.

In a blog post, Danny Meyer and Randy Garutti, the Shack’s founder and CEO, said the loan program “came with no user manual and it was extremely confusing.”

They’re giving the corona cash back. And they’re very sorry for swiping the little guy’s french fries.

Will other big businesses follow?

Shake Shack’s decision to return the money won’t come close to overcooking the company’s finances. It raised $150m in an equity offering last week.

The company’s move to extinguish the PR flames means the smoke in its kitchen is clearing. But people are licking their chops to give other chains a turn or 2 on the grill.

They took advantage of a provision in the coronavirus relief package that let them seek loans for different subsidiaries. 

  • Ruth’s Chris Steak House, which has 150 locations and is valued at $250m, pocketed $20m — the same amount as the Brazilian steakhouse chain Fogo de Chão. 
  • J. Alexander’s Holdings, a casual-dining company, took in $15.1m.
  • In all, Forbes tallied 71 publicly traded companies that received money under the Paycheck Protection Program (PPP) — for a total of $300m, or 0.09% of the total funding that was distributed.

Meanwhile, the little guys are awaiting their 1st helping

Congress is still hammering out the details of a 2nd infusion of cash for the PPP, which could add another $300B+ to the fund.

Tell us: Are you a small-business owner who had a PPP loan request denied? We’d like to hear from you. Please fill out our form here.

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The Hustle’s Greatest Hits

ICYMI, we turned 4 years old yesterday — and we want to keep the birthday festivities rollin’.

Today, we’re highlighting a few Greatest Hits from our Sunday archive. If you’re suffering from corona overload, these throwbacks make for mighty fine reading.

Did you love one of these stories? Tell your friends by using the ambassador link at the bottom of this email — we’re giving away Hustle swag all week long to say thanks.

Party People

The Silicon Valley set wants an invite to the Clubhouse

If there’s one thing we really miss about our old social lives, it’s that warm feeling you get when you awkwardly elbow your way into a conversation at a party.

Flashback: At a social gathering with better-dressed people

Me: Sooo… if you were a kind of vegetable, what veggie would you be?

Them: …

Me: :::awkwardly slinks back to the cheese plate:::

Fun, right?

Thanks to a new social networking app that’s making the rounds on VC Twitter, you can recreate that fuzzy sensation/hot spike of shame. You’ll just need an invitation.

Clubhouse is the new Club Quarantine

TechCrunch reported that Clubhouse, a new social networking app, “blew up” among Silicon Valley types this weekend.

It’s basically an audio-only version of Houseparty, where you can drop into random conversations with others. 

TechCrunch says the social dynamics look a lot like an actual house party: “High-energy rooms attract crowds while slower ones see participants slip out to join other chat circles.”

But this Clubhouse has a velvet rope

Right now, Clubhouse has no public app (it’s invite only). It doesn’t even have a website yet (no, it’s not — don’t be like the cunning investors who got their Zooms mixed up).

If Clubhouse’s bouncer turns you away at the door, try going down the street to the Chatparty. That’s a different version of a less-good Houseparty: video chat without audio.

Chatparty just launched on Product Hunt, and one commenter already found his preferred silent hang: “My favorite room thus far is ‘Taking a dump, but never pointing the camera down.’”

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How this outdoor athletic brand is building an indoor community

Yoga classes, gym sessions, even beach workouts — all wiped away until further notice. 

That’s bad news for Vuori. Not just for their products (athletic apparel), but also for the community they’ve worked so hard to build. But humans are a resourceful bunch, so they figured out a way around it… 

Instagram Live. 

“ACTV Club,” a daily live IG workout, is becoming an at-home hit

Ranging from breathwork and yoga to functional fitness and even takeovers with big-time trainers, Vuori’s series is a masterclass on how to make the best of a bad situation. 

What started as a way to help their community is now a viral hit, with sites like Cosmopolitan and PopSugar naming ACTV Club one of their top at-home and online workouts.  

What’s next for Vuori? The only logical move: an IG Live podcast. 

The Rise and Shine” brings founder Joe Kudla together with guests like Steve Nash and Rob Machado to keep the content coming.

Check out Vuori’s Instagram page and get 20% off your first purchase today. Namaste

Go, Vuori, Go! →
Screen Time

Movie theaters have a post-quarantine message: Take us back?

You probably haven’t seen a positive movie-theater headline since the implosion of MoviePass. But here’s one: Stock prices for Cinemark, AMC, and IMAX have all increased this month, after falling sharply in March.

Cinemark hunkered down and drafted a full-scale plan to get your ass back in the seat this summer. It looks like this: 

  • Doors will swing open in some theaters starting July 1.
  • Movie fans will have to sit several seats apart.
  • Hours might be cut short.

In some states, you won’t have to wait ’til summer: Georgia’s governor just announced that theaters can reopen next week.

The industry just wants a ticket out of this

As people ease into new routines, theaters want to play classic films — one industry leader called out “Grease,” “Harry Potter,” and “Back to the Future” reruns. They don’t want “sad or very heavy dramas,” Reuters reported

They’re also going to whip up some special promotions. During a Potter screening, the chain B&B is considering serving butterbeer to draw uncertain audiences. 

These plans are all theoretical until states approve them — movie theaters do not yet have governing authority, unfortunately. 

But theaters don’t mind the limited audiences that come with a little in-house social distancing. Cinemark reports that it can butter up profits even when its theaters operate at 10% capacity.

All is not well on the silver screen 

That is not to say movie theaters will be going steady when life returns to normal. AMC is reportedly still shopping around for bankruptcy lawyers. Studios are unloading films like the Issa Rae-led “The Lovebirds” onto Netflix, while others are trying their hand at $19.99 paid rentals for new releases.

Experts are asking: Do studios still need theaters? Universal says that “Trolls” set a straight-to-video record, though it isn’t clear whether the profits were anywhere near the film’s $100-million budget. (Straight-to-video numbers aren’t reported the way box-office figures are.)

Facing months without movie releases, even the Oscars are up in the air — execs are meeting on April 28 to decide whether next year’s ceremony can even happen.

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The Hustle Says

Feeling bookish? Read Didion’s Democracy, a kind-of love story/international arms trading how-to set in Hawaii during the Vietnam era. Mahalo!

BoardEffect just published this Crisis Management Toolkit to help your organization transition to full-time remote work. Included: Best practices for crisis communications, social media response plans, and how to successfully run remote board and executive meetings — all for free.*

Monogram is the future of orthopedics, thanks to a combination of 3D printing, machine learning, and artificial intelligence. The result? More accurate implants and less invasive surgeries. Invest in their Series A on SeedInvest while you still can.*

*This is a sponsored post.

Digital Divide

Forget DIY crafts. Rural Colorado is trying out DIY broadband

In 2018, the internet in western Colorado kept cutting out. 

Sometimes essential services lost access at the least opportune times — like when hospitals were sending out patient X-rays. So locals decided to take a hammer to the system.

A council of local governments gathered to fund a DIY solution. The result: Project Thor, a public and private collaboration to expand broadband services into the most rural parts of the state. A few weeks ago, Project Thor finally booted up.

In 2 years, the region built 481 miles of broadband hardware for a slim price tag: $2.6m.

Meet the homework gap, which is even less fun than it sounds

The rise of remote work, classes, birthday parties, and weddings is drawing attention to a long-simmering disparity in the US: Not everyone can access the internet. 

The Atlantic once dubbed the problem the “homework gap,” referring to the population of kids who struggle to complete their schoolwork because they have no internet. 

  • 90% of schools assign homework that requires the internet, according to students.
  • But 15% of households with kids don’t have access to high-speed internet. Among families earning under $30k, that figure jumps to 1 in 3. 

In the Before Times, students may have been able to turn to their local libraries, but now they’re out of options. 

Expanding broadband is looking slicker than ever

To maximize profits, many private providers have skipped over poor, rural areas in favor of the real moneymakers — dense, high-income neighborhoods. 

That’s why local governments have started to step in. An estimated 900 communities across the US now have some type of public broadband service. 

Project Thor isn’t piping powerful service directly into people’s houses. But it beefs up infrastructure for local providers to use. So if we suddenly see a surge of TikTok dances from western Colorado, we’ll know why. 

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🍔 It’s a critical moment for food-delivery services. But Travis Kalanick’s culinary business is stumbling.

🚙 Why some very ugly microvans are having a moment.

☕️ Attention, caffeine fiends: Your coffee shops are trying to endure.

🏀 Wow: The debut of “The Last Dance” — the docuseries about Michael Jordan and the Chicago Bulls of the late ’90s — was the most-watched program on ESPN since college football’s national championship game (on January 13).

Want snippets like these in your browser? Download our Chrome extension here.

The Hustle’s Birthday Giveaway
Ambassador Rewards

Why celebrate a birthday just once a year?

We’re doing it every day this week.

And today, we’re sharing everyone’s favorite birthday gift: socks.

Why socks, you ask? Because a few years ago, Sam did what any sane hustler would do: He strapped a sewing needle onto a pen with dental floss, grabbed some india ink, and tattooed the words “ACT” and “NOW” on his left and right foot, respectively.

It’s Sam’s daily reminder to stop wasting time and go after what’s important.

So, in honor of his ridiculous brilliant life choice, we’re sharing some Hustle socks to inspire you to act now, too.

Want your feet to look like Sam’s? Share The Hustle:

  1. Copy & paste your referral link
  2. Share it far and wide

You’ll get one entry in our raffle for every person who signs up using your referral link. 

We’ll be slingin’ new swag in honor of our birthday every day this week, so keep your eyes peeled 👀

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