What we’re reading (11/10)
“Americans Have Never Been In So Much Debt” (CNN Business). “American households are carrying record amounts of debt as home and auto prices surge, Covid infections continue to fall and people get out their credit cards again. Between July and September, US household debt climbed to a new record of $15.24 trillion, the Federal Reserve Bank of New York said Tuesday. It was an increase of 1.9%, or $286 billion, from the second quarter of the year.”
“‘The End Of The GE We Knew’: Breakup Turns A Page In Modern Business History” (Wall Street Journal). “General Electric Co., the company that for more than a century stood as a beacon of U.S. manufacturing might and management prowess, will split into three public companies, drawing the curtain on an era of modern business—the dominance of industrial conglomerates. The decision, announced Tuesday by Chief Executive Larry Culp, ends the myth that GE wielded a magic touch to run companies better, and make everyone richer, through its management of varied enterprises around the world.”
“Uber, DoorDash And Similar Firms Can’t Defy The Laws Of Capitalism After All” (The Economist). “[L]ook deeper and evidence is mounting that business flywheels are not defying the laws of capitalism. The money that went into building them recalls the railway mania among other past speculative investment crazes. The nine firms that have gone public so far [Uber, Lyft, Didi, and six delivery firms, including DoorDash, Delivery Hero, Meituan, and Zomato] collectively raised more than $100bn…[s]eemingly bottomless pits of investors’ cash went to subsidising rides and deliveries to juice demand. This reached absurd points: a pizzeria could make money by ordering its own food for a discounted price on DoorDash (which then paid back the regular amount).”
“Zillow Insiders Are Blaming An Internal Initiative Called Project Ketchup For The Company’s Home-Flipping Failures” (Insider). “The employees' accounts suggested that Zillow's iBuying problems had less to do with a glitch in its computer-driven, algorithmic approach to purchasing homes or unpredictable swings in prices and more to do with the overexuberance of human managers. Employees said leaders at the company failed to heed signs that Project Ketchup was prompting it to pay too much for homes and damaging key business relationships with contractors who fixed up properties before Zillow relisted them.”
“Hertz Raises $1.3 Billion in ‘Re-IPO.’ The New Stock Will Start Trading Soon.” (Barron’s). “Hertz Global Holdings, the rental car company that emerged from bankruptcy earlier this year, said late Monday that its offering raised more than expected at nearly $1.3 billion. Hertz sold 44.52 million shares at $29 each. It had planned to offer 37.1 million shares at $25 to $29 each, a prospectus said. The shares are set to trade on the Nasdaq under the ticker HTZ on Tuesday. At $29 a share, Hertz is valued at $13.7 billion.”
