Icon death watch

Discussion in 'Flight Following' started by zaitcev, Aug 2, 2019.

  1. 3393RP

    3393RP En-Route

    Joined:
    Oct 8, 2012
    Messages:
    3,272

    Display name:
    3393RP
    My current favorite for a crash and burn is WeWork and other shared office space providers. Their valuation is in the billions. They have signed long term leases for millions of square feet, and spent huge amounts of money purposing the space with high end amenities.

    There are at least a dozen companies engaged in this business model, with enormous exposure.

    Their clients sign short term leases, leaving all of the risk on the lessor when the economy slows down, which, at some point, will happen.
     
    Brad Z and TCABM like this.
  2. 3393RP

    3393RP En-Route

    Joined:
    Oct 8, 2012
    Messages:
    3,272

    Display name:
    3393RP
    Heretic!

    :D
     
    denverpilot, DaleB and GRG55 like this.
  3. denverpilot

    denverpilot Tied Down PoA Supporter

    Joined:
    Nov 8, 2009
    Messages:
    55,441
    Location:
    Denver, CO

    Display name:
    DenverPilot
    “One big family...”

    Or so they told me until they cut 400 out of 500 at my startup a month before Christmas.

    Can laugh about it... now. :)
     
    Palmpilot likes this.
  4. BrianNC

    BrianNC En-Route

    Joined:
    Feb 2, 2009
    Messages:
    2,921
    Location:
    Atlanta

    Display name:
    BrianATL
  5. Tantalum

    Tantalum Final Approach

    Joined:
    Feb 22, 2017
    Messages:
    7,734

    Display name:
    San_Diego_Pilot
    Yeah they're getting eviscerated on glassdoor.. although that's to be expected after you fire half the company

    upload_2019-8-6_17-10-12.png
     
  6. DaleB

    DaleB Final Approach

    Joined:
    Aug 24, 2011
    Messages:
    5,124
    Location:
    Omaha, NE

    Display name:
    DaleB
    "Icon's original business plan envisioned 10 A5s rolling out the factory door each month."

    Which would have been a totally realistic expectation, with their original projected (fantasized?) price tag. Bump the price tag up by $200K or so, and your sales drop off a bit. Imagine. Too bad they don't teach that kind of stuff in Econ 101. Oh... wait.
     
    Tantalum likes this.
  7. Brad Z

    Brad Z Final Approach

    Joined:
    Dec 28, 2007
    Messages:
    5,869
    Location:
    Alexandria VA

    Display name:
    Brad Z
    Without a doubt. There's a WeWork across the street from my office building. It would be one thing if they actually owned property, but like you say they just hold long term leases in swanky areas. It's not particularly recession proof at all. The hip, small tech incubator business model is well worn.
     
  8. dans2992

    dans2992 En-Route PoA Supporter

    Joined:
    Jan 7, 2013
    Messages:
    3,562

    Display name:
    Dans2992
    How busy/full are they?
     
  9. Brad Z

    Brad Z Final Approach

    Joined:
    Dec 28, 2007
    Messages:
    5,869
    Location:
    Alexandria VA

    Display name:
    Brad Z
    Not very. The ground floor looks like an empty Starbucks with a few folks milling around. I don't know about the other floor(s). They have their sign on the 10 story building but I don't think they lease all of the floors.
     
  10. GRG55

    GRG55 Final Approach Gone West

    Joined:
    Dec 29, 2015
    Messages:
    9,307

    Display name:
    Aztec Flyer
    Forecasts are just that. Forecasts. And the financial models used to raise capital have to show rapid growth and good margins; so that drives the input assumptions. "It all looked good on paper". :dunno:

    It sounds as though Icon has a more acute version of what Tesla has been wrestling with. A bunch of tech entrepreneurs, focussed on the technology, and able to raise funds on the basis of producing a "technologically advanced" product (which Silicon Valley VC doesn't require that as part of the pitch?). Unfortunately, the nuts and bolts of production and dealing with "on the factory floor" issues in the manufacturing plant require more than the latest scheduling software and ambitions of future robots. And, with the exception of poor interior fitting, there is absolutely no room for product quality problems when building an airplane.

    That Cirrus was able to manage the ramp to ~750 planes in a year, and survive the crash back down to 1/3 of that almost overnight, is a credit to their ability to deal with exactly this issue.
     
  11. wheaties

    wheaties Pre-takeoff checklist

    Joined:
    Jan 30, 2019
    Messages:
    272
    Location:
    NJ

    Display name:
    wheaties
    WeWork charges an exorbitant fee to rent space in "their" buildings. They're really just an arbitrage play. Most of their business is to other startups. Just give it time...
     
  12. GRG55

    GRG55 Final Approach Gone West

    Joined:
    Dec 29, 2015
    Messages:
    9,307

    Display name:
    Aztec Flyer
    WeWork just played to the prevailing meme in Silicon Valley and on Wall Street. Whether its Uber, Lyft, Airbnb or a host of other start-ups, the pitch is the company is "creating value" by using assets it does not own, and labor that are not employees (the contractor myth), and charge a fee to arbitrage "underutilized assets" with its software application. This "asset light" business model has been all the rage. :idea: Most of these companies will never make a dime for most of their investors, but they keep going by promoting the "scale opportunity". :rofl:
     
    TCABM and 3393RP like this.
  13. DaleB

    DaleB Final Approach

    Joined:
    Aug 24, 2011
    Messages:
    5,124
    Location:
    Omaha, NE

    Display name:
    DaleB
    Right. The problem comes when you forecast being able to sell 120 planes a year at, say, $150K (their original announced proposed forecast price was, I think, actually a little lower than that); then incrementally raise the price to over 250% of that, but don't lower your forecast of sales. The result is easy to forecast.
     
  14. dans2992

    dans2992 En-Route PoA Supporter

    Joined:
    Jan 7, 2013
    Messages:
    3,562

    Display name:
    Dans2992
    I wonder how they got SoftBank to give them billions...?

    I keep thinking “I must be missing something...” “SoftBank must not be total morons.... right!?” :)
     
  15. denverpilot

    denverpilot Tied Down PoA Supporter

    Joined:
    Nov 8, 2009
    Messages:
    55,441
    Location:
    Denver, CO

    Display name:
    DenverPilot
    SoftBank invests in T-Mobile who’s got no spectrum and no hope of ever catching Verizon or AT&T ... ever.

    But they can fill in the crap cheap city only market and steal scraps forever.

    So is it good business or bad business? Hell if I know but T-Mobile is making Jon Legere as much money as he stole from Global Crossing and all he has to do is pretend Magenta is a cool color. LOL.
     
  16. AGLyme

    AGLyme Pre-takeoff checklist

    Joined:
    Jan 13, 2019
    Messages:
    235

    Display name:
    Andrew
    My top future "gee, how did that happen" tank stock is Tractor Supply (TSCO)... Every time I go in, they don't have what I need (basic stuff), and, there are no to little customers. We have one every 12 miles and I live in New England, not exactly "Farm Country"... They seem to have good margins, but...
     
  17. iamtheari

    iamtheari Administrator Management Council Member

    Joined:
    Mar 15, 2016
    Messages:
    2,940

    Display name:
    Ari
    TSC is safe. That’s where I get food for my dog and a surprising number of things for my RV-14. I live in farm country but it took an oil boom to get a TSC. Go figure.

    Icon raising the price and having a sales agreement that basically makes the plane a very front-loaded and expensive rental sticks out to me as the real death knell for the company.
     
    AGLyme likes this.
  18. denverpilot

    denverpilot Tied Down PoA Supporter

    Joined:
    Nov 8, 2009
    Messages:
    55,441
    Location:
    Denver, CO

    Display name:
    DenverPilot
    They do a lot of online business actually. Which is odd. But whatever works.
     
  19. Sam D

    Sam D Cleared for Takeoff

    Joined:
    Feb 27, 2006
    Messages:
    1,482
    Location:
    Petaluma, CA

    Display name:
    Sam D
    The wework CEO said they’re different than Uber. I agree. Uber doesn’t enter into long term agreements with their drivers!

    Unfortunately, I’m guessing there won’t be enough float to safely short their stock in September when they IPO and options will probably be too expensive.
     
  20. murphey

    murphey Touchdown! Greaser! PoA Supporter

    Joined:
    Aug 21, 2008
    Messages:
    10,426
    Location:
    Colorado

    Display name:
    murphey
    Profit & Loss statement.

    Personally, I think Accounting 101 should be required for all high school seniors in order to graduate.
     
  21. Shopshirt

    Shopshirt Pre-takeoff checklist

    Joined:
    Oct 5, 2015
    Messages:
    260

    Display name:
    Shopshirt
    Unless they have a mutual termination for convenience clause as an out in their lease.
     
  22. SoonerAviator

    SoonerAviator Final Approach

    Joined:
    Jul 21, 2014
    Messages:
    6,822
    Location:
    Broken Arrow, OK

    Display name:
    SoonerAviator
    Well, at least a personal finance class. I dunno about full-blown accounting. Most people don’t need to know about how a balance sheet, cash flow, income statement, etc are interrelated. Many will never even look at trial balance. Most will apply for auto/home loans, participate in 401K plans, purchase various insurances, and deal with credit card debt/credit scores. A personal finance course would at least be a decent foundation for major life decisions.
     
    Zeldman likes this.
  23. chartbundle

    chartbundle Pattern Altitude

    Joined:
    Sep 26, 2011
    Messages:
    1,558
    Location:
    State of Confusion

    Display name:
    chartbundle
    I'm hopeful that the WeWork trend for companies simply morphs into them realizing they don't need major office space at all and everyone can work from home. Luckily I just found another 100% remote job, so I still don't have to go into an office, unless one of our customers wants to pay for the privilege.
     
  24. Tantalum

    Tantalum Final Approach

    Joined:
    Feb 22, 2017
    Messages:
    7,734

    Display name:
    San_Diego_Pilot
    Same here, we just massively downsized our office by a factor of almost four.. it's awesome
     
  25. chartbundle

    chartbundle Pattern Altitude

    Joined:
    Sep 26, 2011
    Messages:
    1,558
    Location:
    State of Confusion

    Display name:
    chartbundle
    And in today's Icon news, apparently at KSHN:

    1EC8852D-625F-4919-8DFB-8EB39839CC90.jpeg
     
  26. iamtheari

    iamtheari Administrator Management Council Member

    Joined:
    Mar 15, 2016
    Messages:
    2,940

    Display name:
    Ari
    The dreaded asphalty water landing.
     
  27. Palmpilot

    Palmpilot Touchdown! Greaser! PoA Supporter

    Joined:
    Apr 1, 2007
    Messages:
    19,251
    Location:
    PUDBY

    Display name:
    Richard Palm
    I guess that's what is meant by the term "hard water"! ;)
     
  28. Cluemeister

    Cluemeister Line Up and Wait

    Joined:
    Nov 11, 2015
    Messages:
    875

    Display name:
    Cluemeister
    What kind of gear up/down indicator does the Icon have? Lights? Verbal warning, like "Gear up for water landing"?
     
  29. Half Fast

    Half Fast Final Approach

    Joined:
    May 7, 2016
    Messages:
    6,668
    Location:
    Central Florida

    Display name:
    Half Fast

    Very loud scraping sound at touchdown....
     
  30. Grum.Man

    Grum.Man En-Route

    Joined:
    Jul 17, 2014
    Messages:
    3,446
    Location:
    Statesville NC

    Display name:
    Grum.Man
    Man they just can't seem to get it right. They should put two huge "easy" buttons on the panel, one named water landing the other land!
     
  31. Blatham489

    Blatham489 Pre-takeoff checklist

    Joined:
    Jul 4, 2013
    Messages:
    377
    Location:
    Houston, Scottsdale

    Display name:
    Latham
    There’s a design benefit to the Icon - you can gear up and not have a prop strike - brilliant!
     
  32. SoonerAviator

    SoonerAviator Final Approach

    Joined:
    Jul 21, 2014
    Messages:
    6,822
    Location:
    Broken Arrow, OK

    Display name:
    SoonerAviator
    Marketing will claim that it's a built-in feature!
     
  33. Kenny Phillips

    Kenny Phillips En-Route

    Joined:
    Jul 29, 2018
    Messages:
    4,186

    Display name:
    Kenny Phillips
    Just so that folks know the current standing, this is from ICON's website: The ICON A5 comes fully equipped at $389,000 MSRP.
    Yes, that first number is a three. Round it up, four hundred thousand dollars. About enough to buy a Lake, and a lake house.