Lyft IPO lifts Anthony Foxx

Plus: Checkers freeze out fro-yo sponsor; Theranos power rankings; 2 local stocks +60% in 1Q

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Good morning! Today is Monday, April 1, 2019. Here are today’s big stories in Charlotte-area business news. No joke:

Lyft IPO creates gazillionaires. What about Foxx?

Former Charlotte Mayor Anthony Foxx received some national media love last week, amid the hoopla of Lyft’s IPO. You might recall that Foxx, who also served as President Obama’s transportation secretary, joined Lyft in October 2018 in a role described as “chief policy officer and senior adviser.”

Foxx made the rounds Friday in media interviews on the day the ride-sharing-app company went public, commanding a higher-than-projected $72-per-share price on the NASDAQ. Not bad for a company that lost $911M last year and has never had a profitable quarter.

As IPOs tend to do, Lyft’s made its executives and investors instant millionaires. A Ledger reader wrote in to ask: Is Foxx one of them?

The short answer is it is impossible to know. But hey, it’s fun to speculate and wonder if Foxx is participating in bipartisan political tradition of cashing in big after a stint in government service.

Although Foxx was in the front row of the bell-ringing ceremony on Friday, he is not listed in securities documents as an executive officer or director. That means the company does not have to disclose his stock holdings, if any. Even if he did receive stock when he joined Lyft last year, he probably would not have access to instant cash because the stock cannot be sold for six months — and it could tank like some tech stocks have done (see Snapchat).

One notable politico who is identified: Valerie Jarrett, a longtime senior advisor to Obama who serves on the Lyft board. Her shares were worth $520K at Friday’s close.

Lots to smile about? Foxx (left, in suit and blue tie) at bell-ringing ceremony as Lyft joins the NASDAQ

Community-focused: In interviews Friday, Foxx was not asked if he personally holds stock. Instead, he talked mostly about a new Lyft initiative called Lyft City Works, a $50M plan to help communities by (for instance) offering free or discounted rides to the homeless and the poor and by offering more e-scooters and e-bikes. In announcing it, Foxx said, “At Lyft, we know that, working together, we can do more to make cities people-focused and not car-focused,” which is a curious statement from a company whose core business is linking people to drivers of cars. We’ll see if he can steer some of that money to Charlotte.

Lyft promises to be more financially stable than the private company Foxx worked for prior to serving as transportation secretary — hybrid bus-maker DesignLine, which went bankrupt in 2013.

In an interview Friday with Bloomberg, Foxx said: “I’m really excited about this IPO and Lyft and the great things we are going to do in surface transportation.”


What $30K gets you with the Charlotte Checkers:

Sports-team sponsorship agreements are usually closely guarded state secrets. But thanks to a recent Mecklenburg County court case, we now have some idea how much it costs to sponsor the Charlotte Checkers minor-league hockey team: about $30K a year.

At least that’s the figure that a Georgia company, IceByrd Frozen Yogurt, agreed to pay the Checkers in 2017 as part of a five-year deal. The Checkers sued the company for nonpayment a month ago, which sounds like a garden-variety legal dispute. But as part of the lawsuit, reviewed last week by the Ledger, they included the sponsorship agreement. Here’s what IceByrd was to receive for $30,000 a year:

  • The company logo and link on the Checkers’ website

  • A frozen-yogurt taste-test video by three Checkers players, to be shown at Checkers games

  • A 30-second in-game commercial featuring the Checkers’ mascot, Chubby, along with IceByrd’s penguin mascot, Glacier

  • Regular appearances on the stadium video board

  • 2 big signs: one near the entrance to Bojangles’ Coliseum, the other on the concourse

  • 152 ticket vouchers per year

  • 2 Charlotte Checkers jerseys

  • At 10 games, allowing IceByrd’s Glacier mascot to “be a part of the interaction with our fans and Chubby. The mascot will be able to roam around the concourse, stands and on-ice promotions.” Plus a PA announcement “announcing Glacier as a special guest.”

In happier times, Glacier (left) and Chubby would frolic on the ice. Yet a dispute over finances — a common cause of break-ups — caused the pair to split, according to a recent lawsuit.

The Theranos exposés, ranked:

There are few business sagas as captivating in the last decade as the story of Theranos, the Silicon Valley health sciences company that promised to revolutionize blood testing but that actually turned out to be a gigantic fraud.

If you have no idea what this story is about, or you have heard only the vaguest outlines of it, now is a good time catch up. There’s no Charlotte angle here, but the tale is fascinating. An HBO documentary dropped a couple weeks ago, and a feature film is supposedly in the works starring Jennifer Lawrence as Theranos founder Elizabeth Holmes.

Here’s the definitive ranking of the major completed Theranos projects to date:

  1. “The Inventor: Out for Blood in Silicon Valley,” HBO documentary. Quirky, with some distracting elements, like the behavioral psychologist with a beard on half his face and computer-animated dice-rolling. But effective in showing the appeal of a smooth-talking CEO through behind-the-scenes archival footage.

    Best moment: When the documentary confronts a Fortune writer on the mistakes he made building Holmes up in a largely positive cover story.

    Commitment level: Low, about two hours. Here’s how to watch if you don’t have HBO.

  1. “The Dropout,” ABC Radio podcast. A beginner-level but thorough examination of how Holmes tricked so many people. And you get to hear her weird deep voice, which some employees say she faked to sound more authoritative.

    Best moment: In episode 5, “The Downfall,” when the podcast host confronts Sunny Balwani’s lawyer with damning evidence and makes him squirm like a tobacco exec.

    Commitment level: Medium, about 4 1/2 hours. Listen in car or when walking the dog.

  1. Bad Blood: Secrets and Lies in a Silicon Valley Startup, book by John Carreyrou. The source text of every other media work about Theranos by the Wall Street Journal reporter who exposed the fraud in real time. His understated, journalistic writing style lets the facts drive the amazing story. (My full review here.)

    Best moment: There are plenty, but one of the funniest is when Carreyrou reports in a neutral tone that the Theranos president led this chant in a staff meeting at company HQ: “F— you, Carrey-rou! F— you, Carrey-rou!”

    Commitment level: Substantial, at 352 pages, but the story is fast-moving. Would not be an awful beach book this summer.


Cabin pressure:

Do you ever wonder how much flight attendants get paid for hawking credit cards on flights? The answer: $50 per approved application.

According to the financial blog Doctor of Credit, American Airlines flight attendants can receive bonuses of up to $40 per application if 25 or applications per month are approved.

If you’ve flown before, it’s likely a flight attendant has tried to get you to sign up for a co-branded credit card with a cabin wide announcement and the passing out of an application. Usually they do their best to time this for when you’ve just fallen asleep.

Truth.

Full article here.


Marshmallow crop thriving

Farmers have been having a tough time lately, especially with the recent tariff dispute with China. But WCNC’s Larry Sprinkle reports that this year’s marshmallow harvest at an Iredell County farm is looking robust, according to this April 1 report:

“They are just delicious and succulent marshmallows,” Sprinkle says.

Full details here.


Carolinas & Beyond


Taking stock

Unless you are a day trader, checking your stocks daily is unhealthy. So how about weekly? How local stocks of note fared last week (through Friday’s close), and year to date:

The end of the Q1 is here, and stock indexes are up double digits so far on the year. That means those end-of-quarter reports on your 401(k) or other holdings should look pretty good when they show up in the mail — if you still get them in the mail.

Who are the high flyers locally?

  • Coke Consolidated, +62% on the year.

  • LendingTree, +60%.

  • CommScope, +33%

Headed the other direction:

  • American Airlines, -1%

  • Speedway Motorsports, -10%

  • Kroger (Harris Teeter parent), -11%

Wells Fargo watch

On an otherwise good day for the markets, Wells Fargo stock fell 1.6% on Friday, the first full day of trading after the retirement-under-pressure of CEO Tim Sloan.

The Observer ran a piece over the weekend examining what steps the bank should take to restore confidence. Banking consultant Ken Thomas offered this recommendation:

The third step, reserved for the most serious situations, is to change the bank’s name and rebrand itself so that the public realizes it’s a totally new bank, Thomas said. Wells Fargo also needs to take that step, he said.

The U.S. Patent and Trademark Office reports the name “Wachovia” is available.


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The Charlotte Ledger is an e-newsletter and web site publishing timely, informative, and interesting local business news and analysis Mondays, Wednesdays, and Fridays, except holidays and as noted. We strive for fairness and accuracy and will correct all known errors. The content reflects the independent editorial judgment of The Charlotte Ledger. Any advertising, paid marketing, or sponsored content will be clearly labeled.

The Charlotte Ledger is published by Tony Mecia, an award-winning former Charlotte Observer business reporter and editor. He lives in Charlotte with his wife and three children.