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Tesla Inc (TSLA) Is A Busted Growth Story – Stanphyl
Tesla Inc (TSLA) Is A Busted Growth Story – Stanphyl
Stanphyl Capital‘s commentry for the month ended May 31, 2020, discussing Tesla Inc (NASDAQ:TSLA) is now a busted growth story.
Q1 2020 hedge fund letters, conferences and more
Tesla Is A Busted Growth Story
We remain short Tesla Inc. (TSLA), which I still consider to be the biggest single stock bubble in this whole bubble market. The core points of our Tesla short thesis are:
- Tesla has no “moat” of any kind; i.e., nothing meaningfully proprietary in terms of electric car technology, while existing automakers—unlike Tesla—have a decades-long “experience moat” of knowing how to mass-produce, distribute and service high-quality cars consistently and profitably, as well as the ability to subsidize losses on electric cars with profits from their conventional cars.
- In 2020 Tesla will again lose money, as it has every year in its 17-year existence.
- Tesla is now a “busted growth story”; revenue growth is flatlining while unit demand for its cars is only being maintained via price cutting.
- Elon Musk is a securities fraud-committing pathological liar.
In May, faced with a shortage of demand in an increasingly competitive (see the many links below) electric car environment during an economic depression, Tesla cut prices across the board. Nothing’s more amusing than seeing this giant stock promotion of a company continue to add capacity (expanding its Chinese factory while supposedly breaking ground on brand new factories in Texas and Germany) in order to desperately try to maintain an image of “limitless demand” as it continually slashes prices to unprofitable levels (excluding its unsustainable emission credit sales and accounting fraud) just to utilize its existing capacity.
Tesla's Q1 Earnings
In April Tesla reported $16M in Q1 "earnings" thanks entirely to the sale of $354M in 100% margin emission credits that disappear after next year when other automakers no longer need to buy them as they’ll have enough EVs of their own. Additionally, Tesla’s earnings are typically inflated by around $200M/quarter from its ongoing warranty fraud (here’s an excellent Seeking Alpha article and another one in Fortune explaining some of this), so adjusted for these two factors Tesla would have lost over $500M in Q1, while free cash flow was minus $895M. This is not a viable business. Additionally, Tesla pulled all guidance for the rest of the year, and for good reason as Q2 (with sales dead and the U.S. factory closed for two months due to the coronavirus) will be a lot worse. And as @TeslaCharts pointed out on Twitter, Tesla is no longer a growth company:
(One caveat is that in Q2 Musk may try to recognize part of $600 million in non-cash [it’s already on the balance sheet] deferred revenue from its fraudulently named “Full Self-Driving” [the capabilities of which offer nothing of the kind], thereby turning a money-losing quarter into one showing paper profits. Meanwhile, God only knows how many more people this monstrosity unleashed on public roads will kill, despite February’s NTSB hearing condemning it as dangerous.)
Meanwhile, here’s a great graphic from Twitter user @clausMller17 clearly demonstrating Tesla’s blatantly fraudulently EPA range claims for its cars:
Tesla’s EV market share in Europe (as of now the world’s most competitive EV market) continues to erode as new competition enters the market. Here’s a great graphic from Twitter user @fly4dat showing what’s happening in Norway, Europe’s largest and most advanced EV market:
For those of you looking for a resumption of growth from Tesla’s upcoming Model Y, demand for that car is reportedly disastrous. This is unsurprising, as it will both massively cannibalize sales of the Model 3 sedan and (later this year and in 2021) face superior competition from the much nicer electric Audi Q4 e-tron, BMW iX3 (in Europe & China), Mercedes EQB, Volvo XC40 and Volkswagen ID.4, while less expensive and available now are the excellent new all-electric Hyundai Kona and Kia Niro, extremely well reviewed small crossovers with an EPA range of 258 miles for the Hyundai and 238 miles for the Kia, at prices of under $30,000 inclusive of the $7500 U.S. tax credit. Meanwhile, the Model 3 will have terrific direct “sedan competition” later this year from Volvo’s beautiful new Polestar 2, the BMW i4 and the premium version of Volkswagen’s ID.3.
And if you think China is the secret to the resumption of Tesla’s growth, let’s put that market in perspective even without the coronavirus problem: prior to a recent 10% sales tax exemption Tesla was selling around 30,000 Model 3s a year there, and “the story” is that avoiding the 15% tariff and that 10% sales tax will allow it to sell a lot more. There’s also a $3600 EV incentive available (which will be reduced over the next two years), but China just cut to 300,000 yuan the maximum price allowed for an EV to get it; Tesla is thus slashing its Model 3 price from 323,000 yuan to qualify and will now make little-to-nothing on the car, and thus all volume increases will be profitless. Meanwhile the rule of thumb for the elasticity of auto pricing is that every 1% price cut results in a sales increase of up to 2.4%. If we assume a 2.4x “elasticity multiplier,” domestically produced Model 3s that are 40% cheaper (than the original price at the 30,000/year sales rate) would result in annual sales of just 59,000 (40% x 2.4 = 96% more than the previous 30,000), meaning Tesla’s new Chinese factory would be a massive money-loser vs. its initial 150,000-unit annual capacity and the 500,000/year capacity it will supposedly have in 2021. Even if we were to increase the previous sales rate by 150% to 75,000 cars a year, it would be massively disappointing for Tesla bulls and the factory will be a huge money-loser.
Meanwhile, sales of Tesla’s highest-margin cars (the Models S&X) will be down by over 50% worldwide this year vs. their 2018 peak, thanks to cannibalization from the less expensive Model 3 and direct high-end competition (especially in Europe and China) from the Audi e-tron, Jaguar I-Pace, Mercedes EQC and Porsche Taycan, with multiple additional electric Audis, Mercedes and Porsches to follow, many at starting prices considerably below those of the high-end Teslas. (See the links below for more details.)
And oh, the joke of a “pickup truck” Tesla introduced in November won’t be any kind of “growth engine” either, especially as if it’s ever built it will enter a dogfight of a market.
Meanwhile, Tesla has the most executive departures I’ve ever seen from any company; in May it was reported that the V.P. of Europe & Global Supply Chain and yet another deputy general counsel abandoned ship; here’s the astounding full list of escapees. These people aren’t leaving because things are going great (or even passably) at Tesla; rather, they’re likely leaving because Musk is either an outright crook or the world’s biggest jerk to work for (or both). And in January Aaron Greenspan of @PlainSite published a terrific treatise on the long history of Tesla fraud; please read it!
In May Consumer Reports completely eviscerated the safety of Tesla’s so-called “Autopilot” system; in fact, Teslas have far more pro rata (i.e., relative to the number sold) deadly incidents than other comparable new luxury cars; here’s a link to those that have been made public. Meanwhile Consumer Report’s annual auto reliability survey ranks Tesla 23rd out of 30 brands (and that’s with many stockholder/owners undoubtedly underreporting their problems—the real number is almost certainly much worse), and the number of lawsuits of all types against the company continues to escalate-- there are now over 800 including one proving blatant fraud by Musk in the SolarCity buyout (if you want to be really entertained, read his deposition!).
So here is Tesla’s competition in cars (note: these links are regularly updated)…
- Porsche Taycan
- Porsche Taycan Cross Turismo
- Porsche Macan EV to get Taycan platform and tech
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Audi e-tron: Electric Has Gone Audi
2020 Audi E-Tron Sportback debuts slick new roofline, a bit more range - AUDI E-TRON GT FIRST DRIVE: LOOK OUT, TESLA (available 2020)
- Audi's Q4 e-tron previews entry-level EV for 2021
- Audi e-tron compact hatch to lead brand’s electrification plans
- Audi TT set to morph into all-electric crossover
- THE AWARD-WINNING ALL-ELECTRIC JAGUAR I‑PACE
- Jaguar Land Rover to invest £1bn in three new UK-built EVs
- Mercedes EQC electric SUV available now in Europe & China and in 2021 in the U.S.
- Mercedes EQV Electric Minivan Revealed – Available 2020
- Mercedes EQA electric SUV previewed in exclusive images
- Mercedes EQB Small SUV to boost brand's electric line-up
- Mercedes EQS will be built in addition to the S-Class on a new dedicated electric platform
- Volvo Polestar 2 Arrives 2020
- Polestar 3 will be an electric SUV that shares its all-new platform with next Volvo XC90
- Volvo XC40 Recharge, a 408-HP Electric SUV comes in 2020
- Volvo confirms electric version of next XC90
- Volkswagen unveils the ID.3, its first ‘electric car for the masses’
- VW confirms ID4 name for electric crossover
- VW Group to launch 70 pure electric cars over the next decade
- GM Reveals New Ultium Batteries & a Flexible Global Platform to Rapidly Grow EV Portfolio
- GM to Revive Hummer Name on New Electric Pickup Model
- Chevrolet Bolt Now Offers 259 Miles of Range
-
GM's Detroit-Hamtramck plant expected to build electric Escalade, Sierra
GM is transforming Cadillac into an electric brand - GM & Honda to Jointly Develop Next-Generation Honda EVs Powered by GM Ultium Batteries
- 258-Mile Hyundai Kona electric is available now for under $40,000
- Genesis Electric Luxury SUV Coming in 2022
- 239-Mile Kia Niro EV is Available Now For Under $40,000
- Kia Soul EV’s Range Jumps to 243 Miles
- New 2021 electric Kia SUV to offer Porsche Taycan pace with 0-62mph in 3s
- All-Electric Ford Mustang Mach-E Delivers Power, Style and Freedom for New Generation
- Electric Ford F-150 arrives in 2021
- Ford to build two European EVs based on VW’s MEB platform
- Nissan LEAF e+ with 226-mile range is available now
- Nissan Ariya Electric SUV Concept Is Destined for Production
- BMW 1 Series Electric Coming As Early As 2021
- BMW iX3 electric crossover goes on sale in 2020
- The BMW i4 EV Will Be the Most Powerful 4-Series
- BMW’s 2021 iNEXT Returns In New Teasers Showing Prototypes Production
- Rivian electric pickup truck- funded by Amazon, Ford, Cox & others- is on the way
- Renault upgrades Zoe electric car as competition intensifies
- New all-electric Renault SUV to arrive in next 18 months
- Peugeot 208 to electrify Europe's small-car market
- Peugeot to offer EV version of new 2008 small crossover
- Electric Mini Arrives 2020
- Toyota and Subaru Agree to Jointly Develop BEV-dedicated Platform and BEV SUV
- Mazda extends MX name to new MX-30 electric crossover
- SEAT will launch 6 electric and hybrid models and develop a new platform for electric vehicles
- Opel sees electric Corsa as key EV entry
- Opel/Vauxhall will launch electric SUV and van in 2020
- Škoda electric Enyaq to come in 5 variants
- New Citroen C4 Cactus to be first electrified Citroen in 2020
- FCA to invest $788M to build new 500 EV in Italy
- BYD will launch electric SUV in Europe
- Maserati to launch electric sports car
- Bentley Will Offer Hybrid Versions of Every Car It Makes and Add an EV by 2025
- Lucid Motors closes $1 billion deal with Saudi Arabia to fund electric car production
- Meet the Canoo, a Subscription-Only EV Pod Coming in 2021
- Two new electric cars from Mahindra in India; Global Tesla rival e-car soon
- Former Saab factory gets new life building solar-powered Sono Sion electric cars
And in China…
- VW ramps up China electric car factories, taking aim at Tesla
- Volkswagen pumps 2 billion euros into China electric vehicle bet
- Audi Q2L e-tron debuts at Auto Shanghai
- Audi will build Q4 e-tron in China
- FAW-Volkswagen’s Foshan plant said to produce e-tron Sportback
- FAW Hongqi starts selling electric SUV with 400km range for $32,000
- FAW (Hongqi) to roll out 15 electric models by 2025
- China’s BYD launches six new electrified vehicles
- Top of Form
- Bottom of Form
- Daimler & BYD launch new DENZA electric vehicle for the Chinese market
- Geely, Mercedes-Benz launch $780 million JV to make electric smart-branded cars
- Mercedes styled Denza X 7-seat electric SUV to hit market
- Mercedes ‘makes mark’ with China-built EQC
- Daimler and BMW to cooperate on affordable electric car in China
- BMW, Great Wall to build new China plant for electric cars
- BAIC Goes Electric, & Establishes Itself as a Force in China’s New Energy Vehicle Future
- BAIC BJEV, Magna ready to pour RMB2 bln in all-electric PV manufacturing JV
- Toyota, BYD will jointly develop electric vehicles for China
- Lexus to launch EV in China taking on VW and Tesla
- GAC Toyota to ramp up annual capacity by 400,000 NEVs
- GAC Aion
- GAC NIO kicks off delivery of HYCAN 007 all-electric SUV
- Chevrolet Menlo Electric Vehicle Launched in China
- Buick Rolls Out First Electric Car for China
- General Motors’ Chinese Venture to Sink $4.3 Billion Into Electric Vehicles by 2024
- Nissan & Dongfeng to invest $9.5 billion in China to boost electric vehicles
- PSA to accelerate rollout of electrified vehicles in China
- Fiat Chrysler, Foxconn Team Up for Electric Vehicles
- Hyundai Motor Transforming Chongqing Factory into Electric Vehicle Plant
- Nio
- Jaguar Land Rover's Chinese arm invests £800m in EV production
- Renault reveals series urban e-SUV K-ZE for China
- Renault & Brilliance detail electric van lineup for China
- Renault forms China electric vehicle venture with JMCG
- Honda Debuts New Everus VE-1 All-Electric SUV, But Only For China
- Honda to roll out over 20 electric models in China by 2025
- Geely launches new electric car brand 'Geometry' – will launch 10 EVs by 2025
- Mazda to roll out China-only electric vehicles by 2020
- Xpeng Motors sells multiple EV models
- Changan New Energy
- WM Motors/Weltmeister
- Chery
- Seres
- Byton
- Enovate
- China's cute Ora R1 electric hatch offers a huge range for less than US$9,000
- Singulato
- JAC Motors releases new product planning, including many NEVs
- Seat to make purely electric cars with JAC VW in China
- Iconiq Motors
- Hozon
- EV maker Bordrin skips flash, keeps real-car focus
- Aiways
- NEVS launches electric-car output with Saab 9-3 platform in China
- Youxia
- CHJ Automotive begins to accept orders of Leading Ideal ONE
- Infiniti to launch Chinese-built EV in 2022
- Zotye Auto to roll out 10 plus NEV models by 2020
- Skywell makes inroads into China’s NEV domain
- Thunder Power
- Leapmotor
- Continental, Didi sign deal on developing EVs for China
- Mine Mobility (Thailand)
Here’s Tesla’s competition in autonomous driving…
- Consumer Reports finds Tesla's Navigate on Autopilot is far less competent than a human driver
- Navigant Ranks Tesla Last Among Automakers & Suppliers for Automated Driving
- Tesla has a self-driving strategy other companies abandoned years ago
- Waymo and Lyft partner to scale self-driving robotaxi service in Phoenix
- Jaguar and Waymo announce an electric, fully autonomous car
- Renault, Nissan partner with Waymo for self-driving vehicles
- Voyage Partners with FCA to Deliver Fully Driverless Cars
- Fiat Chrysler partners with Aurora to develop self-driving commercial vans
- Hyundai and Kia Invest in Aurora
- Aptiv and Hyundai Motor Group complete formation of autonomous driving joint venture
- Cadillac Super Cruise™ Sets the Standard for Hands-Free Highway Driving
- Honda Joins with Cruise and General Motors to Build New Autonomous Vehicle
- SoftBank Vision Fund to Invest $2.25 Billion in GM Cruise
- Ford-VW alliance with Argo could redraw self-driving sector
- VW taps Baidu's Apollo platform to develop self-driving cars in China
- Audi to join Daimler, BMW self-driving tech alliance
- Daimler's heavy trucks start self-driving some of the way
- SoftBank, Toyota's self-driving car venture adds Mazda, Suzuki, Subaru Corp, Isuzu Daihatsu
- Volvo cars to be powered by Luminar LiDAR technology for safe self-driving
- Continental & NVIDIA Partner to Enable Production of Artificial Intelligence Self-Driving Cars
- Mobileye & multiple OEMs
- Nissan gives Japan version of Infiniti Q50 hands-free highway driving
- Hyundai to start autonomous ride-sharing service in Calif.
- Uber unveils next-generation Volvo self-driving car
- Pony.ai raises $462 million in Toyota-led funding
- Baidu kicks off trial operation of Apollo robotaxi in Changsha
- Toyota to join Baidu's open-source self-driving platform
- Baidu, WM Motor announce strategic partnership for L3, L4 autonomous driving solutions
- Baidu plans to mass produce Level 4 self-driving cars with BAIC by 2021
- Didi Chuxing Teams with NVIDIA for Autonomous Driving and Cloud Computing
- Geely selects Volvo, Veoneer joint venture as autonomous tech supplier
- BMW and Tencent to develop self-driving car technology together
- BMW, NavInfo bolster partnership in HD map service for autonomous cars in China
- FAW Hongqi readies electric SUV offering Level 4 autonomous driving
- Tencent, Changan Auto Announce Autonomous-Vehicle Joint Venture
- Huawei steps up ambitions in self-driving vehicles race
- BYD partners with Huawei for autonomous driving
- Lyft, Magna in Deal to Develop Hardware, Software for Self-Driving Cars
- Deutsche Post to Deploy Test Fleet Of Fully Autonomous Delivery Trucks
- ZF autonomous EV venture names first customer
- Magna’s new MAX4 self-driving platform offers autonomy up to Level 4
- Groupe PSA’s safe and intuitive autonomous car tested by the general public
- Mitsubishi Electric to Exhibit Autonomous-driving Technologies in New xAUTO Test Vehicle
- Apple acquires self-driving startup Drive.ai
- Momenta – Building Autonomous Driving Brains
- JD.com Delivers on Self-Driving Electric Trucks
- NAVYA Unveils First Fully Autonomous Taxi
- Fujitsu and HERE to partner on advanced mobility services and autonomous driving
- Lucid Chooses Mobileye as Partner for Autonomous Vehicle Technology
- Amazon in Advanced Talks to Buy Self-Driving-Car Tech Company Zoox
- Nuro’s Robot Delivery Vans Are Arriving Before Self-Driving Cars
Here’s where Tesla’s competition will get its battery cells…
- Panasonic (making deals with multiple automakers)
- LG
- Samsung
- SK Innovation
- Toshiba
- CATL
- BYD
- Northvolt (backed by VW & BMW)
- Ultium (General Motors & LG joint venture)
- UK companies AMTE Power and Britishvolt plan $4.9 billion investment in battery plants
- Farasis
- Akasol
- Cenat
- Wanxiang
- Svolt
- Saft
- Romeo Power
- Toyota accelerates target for EV with solid-state battery to 2020
- ProLogium Technology Will Produce First Next Generation Lithium Ceramic Battery For EVs
- BMW invests in Solid Power solid-state batteries
- Ford invests in Solid Power solid-state batteries
- Hyundai Motor developing solid-state EV batteries
Most car makers will use those battery cells to manufacture their own packs. Here are some examples:
- Daimler starts building electric car batteries in Tuscaloosa – one of 8 battery factories
- GM picks Lordstown site for $2.3 billion battery plant
- GM inaugurates battery assembly plant in Shanghai
- PSA to assemble batteries for hybrid, electric cars in Slovakia
- Honda Partners on General Motors' Next Gen Battery Development
- France's Saft plans production of next-gen lithium ion batteries from 2020
- Sokon aims to be global provider of battery, electric motor, electric control systems
- BMW Group invests 200 million euros in Battery Cell Competence Centre
- BMW Brilliance Automotive opens battery factory in Shenyang
- Rimac is going to mass produce batteries and electric motors for OEMs
Here’s Tesla’s competition in charging networks…
- Electrify America is spending $2 billion building a high-speed U.S. charging network
- EVgo is building a U.S. charging network
- 191 U.S. Porsche dealers are installing 350kw chargers
- ChargePoint to equip Daimler dealers with electric car chargers
- GM and Bechtel plan to build thousands of electric car charging stations across the US
- Ford introduces 12,000 station charging network, teams with Amazon on home installation
- Petro-Canada Introduces Coast-to-Coast Canadian Charging Network
- Volta is rolling out a free charging network
- Ionity has over 150 European 350kw charging stations
- E.ON and Virta launch one of the largest intelligent EV charging networks in Europe
- Volkswagen plans 36,000 charging points for electric cars throughout Europe
- Smatric has over 400 charging points in Austria
- Allego has hundreds of chargers in Europe
- PodPoint UK charging stations
- BP Chargemaster/Polar is building stations across the UK
- Instavolt is rolling out a UK charging network
- Fastned building 150kw-350kw chargers in Europe
- Deutsche Telekom launches installation of charging network for e-cars
- Shell starts rollout of ultrafast electric car chargers in Europe
- Total to build 1,000 high-powered charging points at 300 European service-stations
- Volkswagen, FAW Group, JAC Motors, Star Charge formally announce new EV charging JV
- BP, Didi Jump on Electric-Vehicle Charging Bandwagon
- Evie rolls out ultrafast charging network in Australia
- Evie Networks To Install 42 Ultra-Fast Charging Sites In Australia
And here’s Tesla’s competition in storage batteries…
- Panasonic
- Samsung
- LG
- BYD
- AES + Siemens (Fluence)
- GE
- Bosch
- Mitsubishi Hitachi
- NEC
- Toshiba
- ABB
- Saft
- Johnson Contols
- EnerSys
- SOLARWATT
- Schneider Electric
- Sonnen
- Kyocera
- Kokam
- NantEnergy
- Eaton
- Nissan
- Tesvolt
- Kreisel
- Leclanche
- Lockheed Martin
- EOS Energy Storage
- ESS
- UET
- electrIQ Power
- Belectric
- Stem
- business q1 earnings stanphyl capital tesla tesla car sales nasdaq eos link yuan
Spread & Containment
The Coming Of The Police State In America
The Coming Of The Police State In America
Authored by Jeffrey Tucker via The Epoch Times,
The National Guard and the State Police are now…
Authored by Jeffrey Tucker via The Epoch Times,
The National Guard and the State Police are now patrolling the New York City subway system in an attempt to do something about the explosion of crime. As part of this, there are bag checks and new surveillance of all passengers. No legislation, no debate, just an edict from the mayor.
Many citizens who rely on this system for transportation might welcome this. It’s a city of strict gun control, and no one knows for sure if they have the right to defend themselves. Merchants have been harassed and even arrested for trying to stop looting and pillaging in their own shops.
The message has been sent: Only the police can do this job. Whether they do it or not is another matter.
Things on the subway system have gotten crazy. If you know it well, you can manage to travel safely, but visitors to the city who take the wrong train at the wrong time are taking grave risks.
In actual fact, it’s guaranteed that this will only end in confiscating knives and other things that people carry in order to protect themselves while leaving the actual criminals even more free to prey on citizens.
The law-abiding will suffer and the criminals will grow more numerous. It will not end well.
When you step back from the details, what we have is the dawning of a genuine police state in the United States. It only starts in New York City. Where is the Guard going to be deployed next? Anywhere is possible.
If the crime is bad enough, citizens will welcome it. It must have been this way in most times and places that when the police state arrives, the people cheer.
We will all have our own stories of how this came to be. Some might begin with the passage of the Patriot Act and the establishment of the Department of Homeland Security in 2001. Some will focus on gun control and the taking away of citizens’ rights to defend themselves.
My own version of events is closer in time. It began four years ago this month with lockdowns. That’s what shattered the capacity of civil society to function in the United States. Everything that has happened since follows like one domino tumbling after another.
It goes like this:
1) lockdown,
2) loss of moral compass and spreading of loneliness and nihilism,
3) rioting resulting from citizen frustration, 4) police absent because of ideological hectoring,
5) a rise in uncontrolled immigration/refugees,
6) an epidemic of ill health from substance abuse and otherwise,
7) businesses flee the city
8) cities fall into decay, and that results in
9) more surveillance and police state.
The 10th stage is the sacking of liberty and civilization itself.
It doesn’t fall out this way at every point in history, but this seems like a solid outline of what happened in this case. Four years is a very short period of time to see all of this unfold. But it is a fact that New York City was more-or-less civilized only four years ago. No one could have predicted that it would come to this so quickly.
But once the lockdowns happened, all bets were off. Here we had a policy that most directly trampled on all freedoms that we had taken for granted. Schools, businesses, and churches were slammed shut, with various levels of enforcement. The entire workforce was divided between essential and nonessential, and there was widespread confusion about who precisely was in charge of designating and enforcing this.
It felt like martial law at the time, as if all normal civilian law had been displaced by something else. That something had to do with public health, but there was clearly more going on, because suddenly our social media posts were censored and we were being asked to do things that made no sense, such as mask up for a virus that evaded mask protection and walk in only one direction in grocery aisles.
Vast amounts of the white-collar workforce stayed home—and their kids, too—until it became too much to bear. The city became a ghost town. Most U.S. cities were the same.
As the months of disaster rolled on, the captives were let out of their houses for the summer in order to protest racism but no other reason. As a way of excusing this, the same public health authorities said that racism was a virus as bad as COVID-19, so therefore it was permitted.
The protests had turned to riots in many cities, and the police were being defunded and discouraged to do anything about the problem. Citizens watched in horror as downtowns burned and drug-crazed freaks took over whole sections of cities. It was like every standard of decency had been zapped out of an entire swath of the population.
Meanwhile, large checks were arriving in people’s bank accounts, defying every normal economic expectation. How could people not be working and get their bank accounts more flush with cash than ever? There was a new law that didn’t even require that people pay rent. How weird was that? Even student loans didn’t need to be paid.
By the fall, recess from lockdown was over and everyone was told to go home again. But this time they had a job to do: They were supposed to vote. Not at the polling places, because going there would only spread germs, or so the media said. When the voting results finally came in, it was the absentee ballots that swung the election in favor of the opposition party that actually wanted more lockdowns and eventually pushed vaccine mandates on the whole population.
The new party in control took note of the large population movements out of cities and states that they controlled. This would have a large effect on voting patterns in the future. But they had a plan. They would open the borders to millions of people in the guise of caring for refugees. These new warm bodies would become voters in time and certainly count on the census when it came time to reapportion political power.
Meanwhile, the native population had begun to swim in ill health from substance abuse, widespread depression, and demoralization, plus vaccine injury. This increased dependency on the very institutions that had caused the problem in the first place: the medical/scientific establishment.
The rise of crime drove the small businesses out of the city. They had barely survived the lockdowns, but they certainly could not survive the crime epidemic. This undermined the tax base of the city and allowed the criminals to take further control.
The same cities became sanctuaries for the waves of migrants sacking the country, and partisan mayors actually used tax dollars to house these invaders in high-end hotels in the name of having compassion for the stranger. Citizens were pushed out to make way for rampaging migrant hordes, as incredible as this seems.
But with that, of course, crime rose ever further, inciting citizen anger and providing a pretext to bring in the police state in the form of the National Guard, now tasked with cracking down on crime in the transportation system.
What’s the next step? It’s probably already here: mass surveillance and censorship, plus ever-expanding police power. This will be accompanied by further population movements, as those with the means to do so flee the city and even the country and leave it for everyone else to suffer.
As I tell the story, all of this seems inevitable. It is not. It could have been stopped at any point. A wise and prudent political leadership could have admitted the error from the beginning and called on the country to rediscover freedom, decency, and the difference between right and wrong. But ego and pride stopped that from happening, and we are left with the consequences.
The government grows ever bigger and civil society ever less capable of managing itself in large urban centers. Disaster is unfolding in real time, mitigated only by a rising stock market and a financial system that has yet to fall apart completely.
Are we at the middle stages of total collapse, or at the point where the population and people in leadership positions wise up and decide to put an end to the downward slide? It’s hard to know. But this much we do know: There is a growing pocket of resistance out there that is fed up and refuses to sit by and watch this great country be sacked and taken over by everything it was set up to prevent.
Spread & Containment
Another beloved brewery files Chapter 11 bankruptcy
The beer industry has been devastated by covid, changing tastes, and maybe fallout from the Bud Light scandal.
Before the covid pandemic, craft beer was having a moment. Most cities had multiple breweries and taprooms with some having so many that people put together the brewery version of a pub crawl.
It was a period where beer snobbery ruled the day and it was not uncommon to hear bar patrons discuss the makeup of the beer the beer they were drinking. This boom period always seemed destined for failure, or at least a retraction as many markets seemed to have more craft breweries than they could support.
Related: Fast-food chain closes more stores after Chapter 11 bankruptcy
The pandemic, however, hastened that downfall. Many of these local and regional craft breweries counted on in-person sales to drive their business.
And while many had local and regional distribution, selling through a third party comes with much lower margins. Direct sales drove their business and the pandemic forced many breweries to shut down their taprooms during the period where social distancing rules were in effect.
During those months the breweries still had rent and employees to pay while little money was coming in. That led to a number of popular beermakers including San Francisco's nationally-known Anchor Brewing as well as many regional favorites including Chicago’s Metropolitan Brewing, New Jersey’s Flying Fish, Denver’s Joyride Brewing, Tampa’s Zydeco Brew Werks, and Cleveland’s Terrestrial Brewing filing bankruptcy.
Some of these brands hope to survive, but others, including Anchor Brewing, fell into Chapter 7 liquidation. Now, another domino has fallen as a popular regional brewery has filed for Chapter 11 bankruptcy protection.
Covid is not the only reason for brewery bankruptcies
While covid deserves some of the blame for brewery failures, it's not the only reason why so many have filed for bankruptcy protection. Overall beer sales have fallen driven by younger people embracing non-alcoholic cocktails, and the rise in popularity of non-beer alcoholic offerings,
Beer sales have fallen to their lowest levels since 1999 and some industry analysts
"Sales declined by more than 5% in the first nine months of the year, dragged down not only by the backlash and boycotts against Anheuser-Busch-owned Bud Light but the changing habits of younger drinkers," according to data from Beer Marketer’s Insights published by the New York Post.
Bud Light parent Anheuser Busch InBev (BUD) faced massive boycotts after it partnered with transgender social media influencer Dylan Mulvaney. It was a very small partnership but it led to a right-wing backlash spurred on by Kid Rock, who posted a video on social media where he chastised the company before shooting up cases of Bud Light with an automatic weapon.
Another brewery files Chapter 11 bankruptcy
Gizmo Brew Works, which does business under the name Roth Brewing Company LLC, filed for Chapter 11 bankruptcy protection on March 8. In its filing, the company checked the box that indicates that its debts are less than $7.5 million and it chooses to proceed under Subchapter V of Chapter 11.
"Both small business and subchapter V cases are treated differently than a traditional chapter 11 case primarily due to accelerated deadlines and the speed with which the plan is confirmed," USCourts.gov explained.
Roth Brewing/Gizmo Brew Works shared that it has 50-99 creditors and assets $100,000 and $500,000. The filing noted that the company does expect to have funds available for unsecured creditors.
The popular brewery operates three taprooms and sells its beer to go at those locations.
"Join us at Gizmo Brew Works Craft Brewery and Taprooms located in Raleigh, Durham, and Chapel Hill, North Carolina. Find us for entertainment, live music, food trucks, beer specials, and most importantly, great-tasting craft beer by Gizmo Brew Works," the company shared on its website.
The company estimates that it has between $1 and $10 million in liabilities (a broad range as the bankruptcy form does not provide a space to be more specific).
Gizmo Brew Works/Roth Brewing did not share a reorganization or funding plan in its bankruptcy filing. An email request for comment sent through the company's contact page was not immediately returned.
bankruptcy pandemic social distancing
Spread & Containment
Revving up tourism: Formula One and other big events look set to drive growth in the hospitality industry
With big events drawing a growing share of of tourism dollars, F1 offers a potential glimpse of the travel industry’s future.
In late 2023, I embarked on my first Formula One race experience, attending the first-ever Las Vegas Grand Prix. I had never been to an F1 race; my interest was sparked during the pandemic, largely through the Netflix series “Formula 1: Drive to Survive.”
But I wasn’t just attending as a fan. As the inaugural chair of the University of Florida’s department of tourism, hospitality and event management, I saw this as an opportunity. Big events and festivals represent a growing share of the tourism market – as an educator, I want to prepare future leaders to manage them.
And what better place to learn how to do that than in the stands of the Las Vegas Grand Prix?
The future of tourism is in events and experiences
Tourism is fun, but it’s also big business: In the U.S. alone, it’s a US$2.6 trillion industry employing 15 million people. And with travelers increasingly planning their trips around events rather than places, both industry leaders and academics are paying attention.
Event tourism is also key to many cities’ economic development strategies – think Chicago and its annual Lollapalooza music festival, which has been hosted in Grant Park since 2005. In 2023, Lollapalooza generated an estimated $422 million for the local economy and drew record-breaking crowds to the city’s hotels.
That’s why when Formula One announced it would be making a 10-year commitment to host races in Las Vegas, the region’s tourism agency was eager to spread the news. The 2023 grand prix eventually generated $100 million in tax revenue, the head of that agency later announced.
Why Formula One?
Formula One offers a prime example of the economic importance of event tourism. In 2022, Formula One generated about $2.6 billion in total revenues, according to the latest full-year data from its parent company. That’s up 20% from 2021 and 27% from 2019, the last pre-COVID year. A record 5.7 million fans attended Formula One races in 2022, up 36% from 2019.
This surge in interest can be attributed to expanded broadcasting rights, sponsorship deals and a growing global fan base. And, of course, the in-person events make a lot of money – the cheapest tickets to the Las Vegas Grand Prix were $500.
That’s why I think of Formula One as more than just a pastime: It’s emblematic of a major shift in the tourism industry that offers substantial job opportunities. And it takes more than drivers and pit crews to make Formula One run – it takes a diverse range of professionals in fields such as event management, marketing, engineering and beyond.
This rapid industry growth indicates an opportune moment for universities to adapt their hospitality and business curricula and prepare students for careers in this profitable field.
How hospitality and business programs should prepare students
To align with the evolving landscape of mega-events like Formula One races, hospitality schools should, I believe, integrate specialized training in event management, luxury hospitality and international business. Courses focusing on large-scale event planning, VIP client management and cross-cultural communication are essential.
Another area for curriculum enhancement is sustainability and innovation in hospitality. Formula One, like many other companies, has increased its emphasis on environmental responsibility in recent years. While some critics have been skeptical of this push, I think it makes sense. After all, the event tourism industry both contributes to climate change and is threatened by it. So, programs may consider incorporating courses in sustainable event management, eco-friendly hospitality practices and innovations in sustainable event and tourism.
Additionally, business programs may consider emphasizing strategic marketing, brand management and digital media strategies for F1 and for the larger event-tourism space. As both continue to evolve, understanding how to leverage digital platforms, engage global audiences and create compelling brand narratives becomes increasingly important.
Beyond hospitality and business, other disciplines such as material sciences, engineering and data analytics can also integrate F1 into their curricula. Given the younger generation’s growing interest in motor sports, embedding F1 case studies and projects in these programs can enhance student engagement and provide practical applications of theoretical concepts.
Racing into the future: Formula One today and tomorrow
F1 has boosted its outreach to younger audiences in recent years and has also acted to strengthen its presence in the U.S., a market with major potential for the sport. The 2023 Las Vegas race was a strategic move in this direction. These decisions, along with the continued growth of the sport’s fan base and sponsorship deals, underscore F1’s economic significance and future potential.
Looking ahead in 2024, Formula One seems ripe for further expansion. New races, continued advancements in broadcasting technology and evolving sponsorship models are expected to drive revenue growth. And Season 6 of “Drive to Survive” will be released on Feb. 23, 2024. We already know that was effective marketing – after all, it inspired me to check out the Las Vegas Grand Prix.
I’m more sure than ever that big events like this will play a major role in the future of tourism – a message I’ll be imparting to my students. And in my free time, I’m planning to enhance my quality of life in 2024 by synchronizing my vacations with the F1 calendar. After all, nothing says “relaxing getaway” quite like the roar of engines and excitement of the racetrack.
Rachel J.C. Fu does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
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