2021.06.25

Last Week Tonight John Oliver Westminster dog show Smooth Chris weimaraner

A lot going on in this one, here's a quick table of contents:
Fyretruck

Lordstown Motor Company Endurance article Lordstown Week

A few weeks back I checked in with how Lordstown's fanboy and PR regiment was coping with the loss of their CEO and savoir on the heels of a "short seller hit piece".

I've since taken a small short position - because it's one thing to root agains the Patriots and their stupid fans, it's another to actually place a bet against them. My rationale is that if/when LMC misses-but-don't-miss their production start date in September, the writing will finally be on the wall. Misses-but-don't-miss? "Starting production" is such a vague and weaselable term.

That said, if a vehicle doesn't come off the line a week later, I can see the market all-but-giving up on the company.

That said, $10 October puts were going for like $3 last I checked. Hitting break-even on this isn't unlikely if September brings bad news, but the profit margins are pretty slim. I'm not confident enough in the market's reaction to the production start date being officially pushed right to put any substantial amount of money into it.

But am I confident that LMC will miss its production goal? Of course not. But the hard information seems to only come in the form of SEC disclosures. Everything else is marketing and promises that rely on retaining a shred of credibility.

Looking back

In all, five top executives, including the company's president and its former chief financial officer, sold more than $8 million in stock over three days in early February, according to the filings. ...

One of its executives, Chuan "John" Vo, who oversees Lordstown Motors' propulsion division, sold almost all of his vested equity-99.3%-on Feb. 2, leaving him with 717 shares and proceeds of more than $2.5 million, the filings show. …

Securities lawyers, accountants and analysts say such transactions are highly unusual, particularly because they occurred during a period when many other publicly traded companies bar executives from selling shares.

From WSJ via Matt Levine

Echoing my previous statement about the ambiguity of listing insider selling using nominal values, in this case 99.3% doesn't leave him with much. Of course, it'd be helpful to know what this represents as a percentage of his total holdings - vested and unvested.

Lordstown Week: Monday-Thursday

thebigdeal3717 Stocktwits Lordstown week speed 40mph

Lordstown Week was supposed to be the redemption for fans and speculators - the factory doors would fly open and the world would see that the Endurance is real and very close to production. Some even hoped that the event would be public or open to investors.

It was a closed event. Attendees covered their phones for the factory tour. The prototype trucks were driven by LMC employees at a blistering 40mph.

Lordstown Motors Reddit subreddit investing astroturf hub motors
They'll supposedly be in production in three months. If Ford wanted to steal the hub motor technology (from a video three months before they can ostensibly buy one), they could just buy Elaphe. Perhaps there's a simpler answer to why these cannot be photographed...

For me, Lordstown's viability as a company rests entirely on their hub motors. Everything else is a known quantity and can be resolved with pushed out deadlines and recalls. Likewise, they probably cannot pivot to a traditional drivetrain at this point. So, do the hub motors work?
This is where constistency and credibility matters. "Who cares if they faked preorders?" "Who cares if production dates have been pushed out?" Well, that leaves me less inclined to believe that the Baja racer retired due to battery drain. I'm less inclined to believe the brake manufacturer won't let the truck drive above 40.

But hey, let's see it drive fast with a professional driver on a closed course. Surely the brake manufacturer would permit that; it seems like a critical step to production. Or rollers. Put the thing on a dyno, no braking required.

According to the report, the vehicle was on its first test drive back in January for approximately 10 minutes before the company's Director of Powertrain, Pirakalathan Pathmanathan, said the truck started "driving weird." He decided to pull over, at which point a fire started under the vehicle.

Lordstown claims the issue has been identified, with the PR rep continuing to say, "It wasn’t like the battery exploded, but something went wrong in the hand-build process that led to what caused the fire to start...

Lordstown prototype burned fire truck Endurance Fyretruck

So we hear about the Teslas and Dells where the battery kerplodes and you end up with a horrific roadside barbecue. That doesn't appear to be the case here, rather something went wrong in the (highly localized) driveline that was purportedly caused by human error in assembly.

Hub motors seem great for construction vehicles that drive very, very slowly. They might work at highers speeds with some ventilation. But if you put brake rotors next to them and start driving like a person rather than a construction worker, I'm not sure the math adds up. I'd like to believe the *somebody* did that math before creating a multi-billion dollar pre-revenue car company. I'd also like to believe Elizabeth Holmes did some research before selling the world on the idea of a microwave-size blood test machine.

Reddit Lordstown Motors subreddit astroturfing baja racer
LMC demoed a people mover that was talked up as a "military recon vehicle". Even more hilariously, somehow the Baja truck went from "disaster with a totally valid explanation" to "legend". This is the world of Fyre.

Lordstown Week: Friday factory live tour and Q&A

Lordstown week factory battery

The company did some presentations in front of various stages of assembly.

Lordstown week factory Q and A


/u/whydoineedanamebro
The sound is horrific!!!
Why did't they pre-record this??

I tuned into Friday's Q&A, although a combination of their poor audio, my phone's poor audio, and a brief distraction means I didn't get the whole thing. But here's the synsopsis...
Softballs focused on stamping and paint. Cool. The LMC subreddit had put together a list of questions beforehand, I guess none of them were asked:


/u/BeverlyHills70117
However, one they may answer and is important from our camp... [Investor Relations] has been utterly unresponsive for months, ignoring all emails... the head of IR recently got promoted to the top team, will there be a renewing of the IR team and any consideration of actually answering our questions when possible.

Sure, you've been ghosted by IR, but wouldn't you rather hear about GM's abandoned stamping machine???


/u/SmilingZebra
They haven't asked any of my questions yet, if they answer anybody's from the group, let us all know... Just curious if this is a ruse

The market's response

In a word, 'meh'.


/u/Fit_Cartographer_718
This stock should be popping to the upside not downside. WTF is going on?

I mean, I guess it's because all that happened was LMC drove prototypes that everyone knows exist and saw equipment that everyone knows exists.

The LMC pump playbook

Lordstown Motor Company Reddit WallStreetBets investments

So the fanboys, the astroturfers, and the bagholders converge on /r/LordstownMotors. They rally around the occasional WSB post, all jumping in to downvote skeptics and provide canned responses when someone points out a negative headline. The amusement value has kind of declined as I've seen the script get worn out. Here it is:

Bad news or criticism Canned response My read
LMC claimed preorders that were illegitimate. They've already owned up to that, do you believe Tesla preorders??? There's a lot of 'Whatabout Tesla'. Tesla Carroll Shelbyed an electric motor into a Lotus, proving to the world what they were capable of long before the Model S was even conceived. Let's just run with, "the company lied about preorders for marketing". It has no impact on the technology and it's not like the SEC is going to do anything.
2021 production targets were reduced significantly. Yes but the factory is 85% tooled and 2022 production targets are through the roof! Until they're reduced. That's how this has worked from day one.
The company issued a going concern disclosure that they don't have the funds to operate for another year. This is media FUD! Also there are many promising talks to get outside money. Also they're going to secure a federal loan. Also the factory is worth [think of a number] million dollars! It's funny they still call it FUD when it was a disclosure by LMC. Anyway, blaming the "biased media" stopped being a good look in January. My understanding is the ATVM loan can only be used to supplement other funding, not replace it. "Funding about to be secured" has been a refrain for quite some time. Hasn't happened yet.
The CEO and CTO left/were fired. Burns is an engineer not a CEO and his time had passed, we - I mean LMC - needs someone who can make production happen. This is actually really great news. Huh, Burns was Electric Jesus just a minute ago. Now you never liked him. Still, seems disruptive to have a CEO vacancy three months before production starts.
Ford and GM are going to eat LMC's lunch. LMC is building fleet vehicles, they won't compete with the e-F150. That's almost a fair point, except that I've seen plenty of fleet F150s.
The Baja racer withdrew after 40 miles. That was from abnormal battery draw! They... they hyped this demonstration and showed up to the race without understanding that *racing* requires more battery drain? That's actually more discomforting than if they simply said they broke a hub motor. Anyway, feels like "increased power draw" was the limited hangout for whatever really happened.
Camping World dropped its parts and service collaboration TBD This one hasn't come up often enough to have a copypasta response.

Lordstown Motor Company Reddit astroturfing earnings selloff Hindenburg
So aside from other bearish news like the truck on fire incident, it's pretty simple. Hindenburg reached out to former LMC employees and maybe some partners and vendors (they cite these anonymously). It only takes one with lingering loyalties to loop in Burns et al.


/u/StockGalifinakis
Ask [Lordstown Q&A] if we can expect any more surprises. And if they plan on refuting any of the repeated and false abuse long share holders have endured, with some positive and true PR?

I'd almost feel sorry for them, except they viciously attack anyone who doubts that RIDE = AMERICA = TSLAx100. But hey, at least there's implicit acknowledgement that the company is full of false PR.
Meme stonks

WallStreetBets Charles Payne Dave Portnoy is a little bitch

While Cramer seems to play the love/hate game with WSB, Charles Payne has consistently (well, as consistently as I've seen clips) defended retail.


/u/scorchur
Why does payne sound like he's a dedicated member of wallstreet bets

It's kind of funny that Paperhands Portnoy lost money he doesn't care about during the meme debacle. It's hilarious that some of his probably-just-as-douchey followers did too.


/u/imtotallyhighritemow
It's a popularity contest, Portnoy was brought on to be hated to pump Payne's stock in this community. Portnoy fulfills press appearance contracts with Fox(cash monies), and wsb gets a reason to tune into Payne.

They only care that you tune in, they both make money through your attention not through markets and investments.

Well, Payne might have gone a bit off script with the "little bitch" comment. Yeah the video isn't really all that good, Portnoy continually changes the retail trader group he's talking about in order to paint himself as not at fault or a victim. So it's really just the two talking past each other.

Back to Levine, this time discussing the AMC pants incident and raising market capital in the meme economy...

If you are the CEO of a company that is considering bankruptcy, should you:

Put on a suit, buckle down to sharpen your financial plan, and engage in marathon meetings with creditors to try to hammer out a forbearance, or
Put on no pants and do a bunch of Zoom interviews with YouTube trading influencers where you complain about short sellers?

Option 1 is the traditional answer, but if Option 2 makes your stock price double and gives you enough equity cushion to negotiate with your creditors from a position of strength, what are you doing with pants on? The corporate-finance opportunity set has been dramatically expanded, but not in ... like ... business-y ways? Raising a ton of money at a price unrelated to fundamental value is just a better corporate finance move than increasing your fundamental value would be. It is hard to know what to do about that. Which is why there need to be new textbooks.

Source.
To the moon

SPCE Virgin Galactic covered call investing investment ouch

The tradition continues, I sell a covered call, the company moons (see also: GME, AMC). When I suggested the bull case for SPCE last month, I didn't realize Sir Richard was aiming for a July flight.

Still decent gains... is what I always tell myself through tears. And I had some in my 401k that I converted to cash. Still bullish, but maybe we'll get a dip between now and July.


/u/Chicano_Ducky
This isn't even a fun bubble like dotcom where everyone makes money
This is like being in the upside down from stranger things
Reality shows up and fucks off for no reason
Babe in toyland


Project

Veranda construction yard gazebo roof Simpson RTU2 2x2

I'm still waiting on RTU2s to continue roof construction.

Veranda construction yard gazebo wall 1x4 panel redwood scaffolding

I'm thinking it's best to only put wall sections up where there's a roof, so the lack of roof hardware is slowing everything down. That and the lack of June gloom.

Veranda construction yard gazebo 1x4 saw stain Cabot redwood

Saw, dip, mount. Saw, dip, mount.

Veranda construction yard gazebo redwood roof wall
Gentlemen's Beer Exploration Society rides again


Me
Our March GBES event was bookended with the staff telling us that breweries and dine-in would be shut down statewide starting the following day.

That was more than a year ago. After some backyard, socially-distanced explorations, we finally shouldered through to tourists to visit Hess in Seaport Village.

Hess tasting room Seaport Village San Diego

It wasn't so long ago that Hess was a nanobrewery in Miramar.

Stone tasting room tap list Wuhan Hong Deng Long Red Lanterns beer

We then scooted down to Stone where I felt it necessary to try the Wuhan stout that had been sitting in barrels since 2018.
Remnant fin

Remnant From the Ashes rat cage

J and me wrapped up our DLC playthrough and gave survival mode a try.

Remnant From the Ashes survival mode

Survival is pretty well done. You basically progressively create a build by buying and looting as you run through random maps from the main game. The downside, of course, is that most bosses are really difficult and will end your run in its first round.
Risk of Rain 2/PS4

RoR2 Risk of Rain 2 Beetle Queen Stone Titan bosses gulp

We're now doing a NG+ playthrough of Dying Light with Risk of Rain 2 as our alternate.

Mass Effect: Legendary Edition

Mass Effect Legendary Edition Normandy Citadel flying space

I have a few games queued up, but needing a PS4 option I fired up the Mass Effect remaster. I hold the original in pretty high regard, so I was both eager to give it another playthrough and hopeful that it aged gracefully.

Mass Effect Legendary Edition Eden Prime video reaper
Ah yes, "Reapers".

So what did Bioware do for this post-Shadow Realms/post-Andromeda/post-Anthem cash grab? Here are the relevant pieces (per me) taken from IGN who copied them from the official site:
This all sounds great, not crazy-ambitious but more than superficial. So, how does the game hold up? How substantive is the remaster?

Mass Effect Legendary Edition intro text
... Warpy McGateface

Mass Effect - like other Bioware RPGs - is about two things: worldbuilding and dialogue. While the playable geography isn't massive, ME is set in a universe that is detailed and expansive. There is substance below the surface; the game isn't a collection of environments with baddies.

Mass Effect Legendary Edition Shepard M7 assaut rifle combat Eden Prime

The retrofitted combat system is pretty good - it's not nearly as frustrating as I remember it. It's far from perfect, but my biggest gripe is how finicky it is to get in cover (and this is a cover shooter, btw). Still, being able to pause combat using the ability and weapon wheels makes the rough edges totally manageable.

Mass Effect Legendary Edition Eden Prime combat Geth husk butt tramp chip

While combat was never a highlight of the game(s), the lack of enemy variety does stand out in [current year]. Games like Gears of War and Borderlands have distinct and memorable classes of baddies, ME1 enemies are either melee or ranged with weapons or powers. While I'm not looking for forced variety - Elcor toting miniguns for some reason - it does seem like *my* combat tactics don't really differ regardless of what is downrange.

Hmmm, on second thought give me the Elcor with miniguns.

Mass Effect Legendary Edition Eden Prime artifact Shepard

The upgraded(?) backgrounds are pretty neat. Full marks.

Mass Effect Legendary Edition Shepard Nihilus Turian SPECTRE

Mass Effect - like other Bioware RPGs - is about two things: worldbuilding and dialogue. While some of the voice acting is subpar by today's standards, the conversations are almost always worth listening to. Sure, I mash the skip button as soon as Ashley opens her mouth, but Garrus's walking test tube story is great and I forgot how much I missed Morlan's famous shop.

Mass Effect Legendary Edition engine room Normandy Tali

Some of the dialogue mechanics are a bit rough. "HAI TALI, WE JUST MET BUT TELL ME ABOUT THE MOST TRAUMATIC THING THAT'S EVER HAPPENED TO YOU!" That's a bit hyperbolic, but there are a lot of expository dialogue trees that are accessed in the most inorganic ways.

Mass Effect Legendary Edition Citadel elevator Garrus Tali

I guess the Xbox 360 elevator load times were upwards of 50 seconds. How did we manage in those days? For the remaster, you can skip through these sequences or listen to the signature elevator banter. And I've always enjoyed that the elevator news announcements are voiced by the same guy who did Beyond Good and Evil (pretty sure, anyway).

Mass Effect Legendary Edition Nihilus Shepard film grain depth of field photo mode

The remaster adds a photo mode with a slider for glowiness.

Mass Effect Legendary Edition Citadel Presidium Mass Relay
Is this thing on?

I forgot how much you get to wander the Citadel after completing the prologue. It very much is the centerpiece of the game, as it is the nexus of both the ME galaxy and its plot. Any amount of tedium that may have resulted from Xbox 360 load times is gone from the remaster.

Mass Effect Legendary Edition Citadel Volus ambassador Din Korlack

And so the Citadel offers entertaining interactions with also-ran aliens complaining about their parochial issues and political frustrations. All of this can be bypassed, but it's considerably more enjoyable than a Fox News town hall debate or some drama about a vaporware truck company.

Mass Effect Legendary Edition Turian Quarian Tali alley Shadow Broker

And while the Citadel's fancy areas are all robed ambassadors and well-tended gardens, it has unsavory areas with crime and gentlemen's clubs and money-skimming AIs. So the Citadel allows some opportunities to exercise your license to kill.

Mass Effect Legendary Edition turian Saren artifact Eden Prime

So ME offers a pretty neat universe with colorful characters and it's become modestly prettier with the remaster.

Mass Effect Legendary Edition Eden Prime husks impaled colonists

And it tells a good story (iirc written by a sci-fi writer) landing somewhere between space opera and hard science fiction. The first one has a good story, anyway.

Mass Effect Legendary Edition Normandy navigation Ashley Garrus Wrex

Gripes?
Rest in peace...

... Cyber legend John McAfee



/u/Bovronius
As I said to someone else... Touting your conspiracy that the government is going to kill you and frame it as a suicide but then actually committing suicide is about the most John McAfee thing I can think of doing... You know that and getting pooped on from a hammock.

Reddit John McAfee career antivirus whale sex banter

... Google Hangouts

Anyone else's Hangouts yelling at you to move to "Chat in Gmail"?
Kevin
What are the chances hitting this button does not ruin everything?
I'm not even sure what that does honestly.
Sants
My hangouts app isn't asking me to switch.
Although, I have the chat app on my work profile.
It's just a new UI.
Alright, I've got the Santos seal of approval. See you on the other side. Maybe.
Kevin

Chris
Godspeed.
And you can edit your comments, finally.
Sants
You can stay in these same rooms.
Sorry, are we calling them 'rooms' now?
I'm back. This chat window looks like shit.
Kevin
Yep, no edit functionality on iPhone so that statement stays as is.
Hmmm.
Sants
If you hold down?
Nope, all I can do is add a stupid reaction.
Kevin

Chris
Laughed at "Nope, all I can do is add a stupid reaction."