Talk about needing a “light bulb moment”

Today, The Museum of Ice Cream raises cash, and Overstock’s CEO is a crash, but first…

GE shares tank after Bernie Madoff watchdog calls them a ‘bigger scam than Enron’

General Electric shares dropped more than 11% Thursday after the conglomerate was accused of using accounting loopholes to hide $38B in losses.

The company’s CEO, Larry Culp, told CNBC the claims are misleading and represent an attempt at “market manipulation.” 

But it’s hard to shake a dang celebrity accountant who’s calling your storied, multibillion-dollar conglomerate “a bigger fraud than Enron.” 

May the street-cred set you free

Harry Markopolos (pronounced Marco-polos), the famed accountant responsible for getting Bernie Madoff thrown in the slammer, published the report, in collaboration with an unnamed hedge fund, that claims GE is shielding its costs and liabilities from investors in its financial statements.

The research — first covered by the WSJ — alleges that the issues lie within GE’s insurance business, and suggests that the company doesn’t have the funds to cover the claims on long-term care policies, which help people pay for nursing homes and assisted living options.

Has the GE bulb finally burned out?

The company has been in a floating freefall since its heyday in the ’90s, when stock hit $51 per share. 

In the past 4 years the company has churned through 3 separate CEOs as it struggled to execute much of its lifeboat strategery toward the future — like revamping its floundering iconic lightbulb business, building a seperate digital division, and selling off its actually successful appliance business.

GE’s stock dropped 33% in 2018, bringing it to about $12, down from $30 in 2017. Its shares are currently around $8 since the dip. 

Put it on the tab

GE’s accounting practices are currently being scrutinized by the SEC and the DOJ regarding a $6B charge to its insurance arm and a $22B write-down to its quick-burning oil and gas unit.

In regards to Markopolos’ allegations, GE claims it isn’t misleading investors and that it has a “strong liquidity position.”

Nonetheless, Markopolos maintains the alleged fraud is “bigger than Enron and WorldCom combined.” If true, the $38B would add up to more than 40% of GE’s market cap.

I scream, you scream: The Museum of Ice Cream raises $40m

We are living in a golden age of ice cream, people — and apparently the VC world agrees, because the startup behind the Museum of Ice Cream just raised $40m.

According to the WSJ, Figure8 was valued at $200m as investors believe that the frozen dessert palace can build further into branded food, products, and, potentially, other themes.

‘Why didn’t I think of that?’ — Said EVERYONE ever

In 2016, the museum’s chief executive, Maryellis Bunn, and her co-founder Manish Vora launched the museum’s first temporary location in New York’s Meatpacking District.

The Willy Wonka-esque exhibit, which allows cream lovers to bathe in a bath of sprinkles, quickly blew up on Instagram — stars like Beyoncé, Katy Perry, and Kim Kardashian all paid a visit.

Soon after, the business launched pop-up exhibits in Los Angeles and Miami, as well as a permanent location in San Francisco, which more than 1.5m people have visited, according to the company.   

Whatchyu gon’ do with all that cash?

Apart from the museum experiences, the MOIC has launched a line of branded ice cream, and worked on commission products such as a clothing line and cosmetics.

The founders said the funding will help the company form additional partnerships, produce more ice cream and open new permanent museum locations in regions like Asia. Figure8 also reportedly pitched investors about using the cash to build a theme park.

When asked why she likes ice cream so much, Bunn said, “Everyone has a connection to ice cream. It doesn’t see gender, it doesn’t see religion.”

weekend binge

Netflix is chill. But every now and then it’s nice to see a flick up on the silver screen.

Scary Stories to Tell in the Dark (a theatre near you) Horror movies are either revolutionary or pure garbage. The book adaptation produced by Guillermo Del Toro fits into the latter. The Macro: People ain’t afraid of no ghosts. The Meecro: Austin Zajur should be in more movies. The Micro: The only cool scene beefed its payoff by force-feeding the audience the original work’s weird blob lady who hugs her targets to death. What fear are we tapping into here? Is the filmmaker establishing that he’s anti-hug? Or was this a bigger move made by the studio to promote anti-hug propaganda? Tune in next week to find out that we don’t follow up on the answer to this important question in any way. — W. Schlag

Overstock CEO’s rant sinks stock 36%, a reminder that when CEOs talk, people listen

Patrick Byrne, the eccentric CEO of Overstock known for betting big on blockchain and, well, saying strange things, has done it again: This time, he issued a befuddling statement on the “Deep State.”

Byrne’s statement — check it out here, it’s worth a full read — claims that he accidentally “helped the Men in Black” (his term for the FBI) conduct a Deep State campaign of ”political espionage conducted against Hillary Clinton and Donald Trump.”

He concluded by saying that, having given his comment and cleared his conscience, he would “speak no more on the subject.” But the wide-eyed head-scratching had already begun…

No one asked for this, Pat

Confused investors in Overstock soon began selling their shares in the company, sending the stock price down more than 36% by midweek (although shares began to rebound yesterday).

Whether or not anything Byrne said was true, the rantings of the conspira-CEO prove an important point:

CEOs’ statements have A TON of impact…

Even when they’re kinda deranged. 

We’ve seen it all before: Does anyone not remember Elon Musk’s infamous “Funding secured” Tweet?

In both cases, rogue CEO statements had huge negative impacts on their businesses in the short term… and required lots of cleanup. 

Both businesses weathered the storms brought on by their chief executives, but these outbursts are a reminder that paying more attention to CEO Twitter feeds than corporate balance sheets can pose some serious problems.

The flower delivery industry puts the petal to the metal

UrbanStems, a flower delivery startup, announced that it has raised $12M to expand from bike-courier delivery in its 2 home markets of DC and NYC to next-day, 3rd-party delivery across the country.

It’s a sign that business is blooming at UrbanStems…

But several floral startups are also looking pretty

After this round of funding, UrbanStems has now raised a total of $27.2m.

But Bouqs, a competing flower delivery startup, has already watered its delivery platform with the nurturing liquidity of $43.1m in venture capital. 

In the US, the retail flower market is an $18B enterprise, and other startups such as Farmgirl Flowers and BloomThat are also keen on clipping off a piece of the market. 

The real competition comes from the OG flower powerhouses…

The flower market is dominated by a few big Flower Powers: 1-800-Flowers, which was founded in 1976, made more than $1.15B in revenue last year, according to its annual report, and Florists’ Transworld Delivery (FTD) did $1.08B in 2017, according to its most recent report.

But revenues at both 1-800-Flower and FTD have been declining over the past few years, likely due to increased competition from startups like UrbanStem and Bouqs that are focused on next-day logistics and flower freshness.

Land your online biz $10K to $10M in 24 hours

Take your special Pitch Day outfit and toss it in the dumpster with your old R. Kelly mixtapes, because there’s a new, faster way to get funding for your startup:

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Clearbanc plans on investing $1b in companies like yours by the end of the year, and they’re doing it by offering term sheets filled out on your terms. 

All you have to do is drop in some details online, and you could get the growth capital (and then some) that your startup needs. Stop picking at market share scraps and start eating the whole damn market pie.

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1. Since we use chemicals to kill wasps, and wasps use chemicals to sting us, we are at constant chemical warfare with wasps
2. Your salary is your company’s monthly subscription fee of you
3. Your face is a combination of thousands of years worth of other people’s faces
4. If you’re self-employed and you talk to yourself at work it’s just a staff meeting
5. Every time a new ship is put in the water the ocean level slightly increases
6. via Reddit

🎢 BONUS NATIONAL ROLLER COASTER DAY FACT🎢 : Ever wonder how many people have a picture of you riding a roller coaster with them in their house?

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