BBQs Cook Fish, Too – Beware the Weber, Traeger IPOs ⋆ Politicrossing
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BBQs Cook Fish, Too – Beware the Weber, Traeger IPOs

BBQ company insiders are trying to put all you fish directly onto hot coals via their IPOs.

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As we all know, Covid-19 policies have created an interesting array of winners and losers. Restaurants, travel and mall-based retail? Wah, wah. Meanwhile, any company remotely tied to housing, remodeling or recreation has been on absolute fire.

So what if your traditionally slow-growth, low-margin business suddenly had its best year ever by a wide margin? You’d probably think very seriously about trying to sell it.

That is exactly what is happening with the spate of BBQ-related IPOs that are about to pour onto this market.

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Are the upcoming initial public offerings of Traeger Pellet Grills and Weber good ideas for your investment portfolio? Be very careful.

First, it’s highly likely they’ve taken the route of public markets because they have nowhere else to go. Truly, who is Traeger’s logical acquirer? In a bygone era, Sears might have represented a possible exit but such buyers no longer exist. Maybe one of the few large competitors in this highly-fragmented industry like Weber? Whoops – they’re going public, too!

Focusing on Weber, what a story they seem to have on their hands, being able to claim 6-month revenue growth rates of over 60%! Wow!

Problem is, IBIS says annual growth of the bbq industry over the last 5 years averaged 4.7%, which means Weber caught lightning in a bottle thanks to this pandemic and they’re trying to cash in. Same with Traeger.

Unfair assessment, you say? Then why are roughly 2/3 of Traeger’s IPO shares being sold by insiders? That’s right, only 1/3 of this offering is to raise working capital for the company. The rest is insiders cashing out.

Hey, I’ll be the first to admit that Traeger grills are pretty cool. And these are familiar names so they may catch a bid based on that familiarity for a while, particularly if this housing market keeps steaming ahead. But by no means are these 10-year investments. If you just can’t help yourself and absolutely have to play with these shares, think more in terms of 10 weeks. Or 10 days.

Truly, how much longer can the explosive growth in our world of economic distortions last? Regardless, is there any way companies like this are going to keep posting 50%+ growth numbers? Pfffffffff.

Heck, as recently as 2019, Weber’s y-o-y revenues declined by 3%. That’s the nature of this industry – a little growth here, a little step back there… slow, stodgy, boring.

Even in Weber’s bounce back year of 2020, when revenues rebounded 15% compared to the prior full year? They made a paltry $88 million on $1.5 billion in revenues. Those are grocery store margins.

Yet despite this industry’s historically slow growth and non-existent margins, Weber’s market cap at IPO next week will be roughly $5 billion, meaning the shares will trade with a P/E of close to 60 like they’re some high-flying tech unicorn! Truly amazing stuff, but par for the course in today’s everything bubble.

As an aside, by the way, don’t even think about looking elsewhere in this sector, like to VELO and its recent announcement that the SPAC is taking BBQ Guys public. Does anyone recall what happened to BBQ retailers in the last economic downturn? If the phrase, “buh-bye,” doesn’t come to mind, you simply weren’t paying attention.

Make no mistake, all these BBQ industry IPOs are ‘greater fool’ investments at their finest. Sorry, but you’re the dumb money the insiders and their private equity backers are asking to buy their shares after one-time growth surges that probably surpassed even their wildest imaginations.

There’s an old saying in poker: if you look around the table and can’t figure out who the fish is, you’re the fish.

In this case, the BBQ company insiders are trying to put all you fish directly on their hot coals.

No, thanks. I’ll have a salad this time instead.

 

P.S. Yes, this is a new pen name but you probably know me. I’ve a new Twitter profile, too… please consider giving me a follow their and we’ll get this train rolling.

Photo by Martin Boose from FreeImages

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Americans sense things are on the wrong track, and have been for quite some time. Among our many challenges, for example: It can no longer be denied that income inequality is skyrocketing. But it is not capitalism that is enriching the few while slowly impoverishing the many. It is America’s long, slow turn away from free markets -- and the vital medium of exchange that underpins them -- that’s doing us in. This pseudonym is a nod to a somewhat-fringey, indulgent personal suspicion I hold with a 1% probability of being accurate: Alan Greenspan never ceased being Ayn Rand’s “man in Washington.” What if the well-known central bank chairman put on the show politicians wanted from him for years, all while secretly trying to return this world to rationality? Instead of destroying copper like D’Anconia, however, Greenspan destroyed money. Without realizing it now, some of you know me but I write under this pen name for two reasons. First: Of all the potential tyrannies we face today, by far the greatest threat to America is the misunderstanding, and therefore the ongoing destruction, of the U.S. dollar. Second: I write with the hope my ideas will stand on their own, aside from any political party, even apart from my own considerable charm and personality. Love me for my ideas, not because I'm beautiful. Politics, markets, more ... the things on which I’m qualified to opine will be unveiled here over time.



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Business

Wrongly Imprisoned Real Estate Broker Demands Investigation of Ohio Prosecutors

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The Obama administration targeted sole proprietors and small businesses in the real estate industry after the crash of 2008, while letting the big banks off the hook with bailouts. One of most horrific cases involved Republican real estate broker Tony Viola, who served nine and a half years in prison as a juicy target of Ohio Democratic prosecutor Dan Kasaris. He was convicted of supposedly tricking banks into offering mortgages with no money down. But in reality, the banks were knowingly offering those loans — evidence the prosecution withheld from him. 

Viola only got out of prison due to an employee of the prosecution, Dawn Pasela, becoming so disgusted with the suppression of evidence showing the banks weren’t tricked and other corruption such as missing computers full of evidence that she changed sides, helping Viola conduct a successful appeal pro se from prison.   

But nothing happened to Kasaris or the federal prosecutor involved, Mark Bennett. Pasela’s parents, Edward and Karen Pasela, who have remained fairly quiet until now, are so outraged that they participated in a a press conference with investigative journalist Brian Douglas last month exposing what happened in Viola’s case and how bad corruption is in the Ohio criminal justice legal system. 

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Douglas put together Viola’s story in a two-part series which included former colleagues of Viola’s testifying to his impeccable character. For his efforts, Douglas was threatened with a lawsuit by Kasaris’s attorney, which Douglas included in his investigation so people are aware of the intimidation. Douglas has been forced to hire his own attorney.

Pasela was threatened by several FBI agents with prosecution if she did not leave the state and avoid testifying. They said they would bring charges against her for violating an NDA — but she never signed an NDA.

Pasela was found dead the day she was supposed to testify in court in Viola’s defense for the first time, and it was blown off as alcohol poisoning with no real investigation. The parents of Pasela want a full investigation into their daughter’s death. 

Kelly Patrick, who was married to John Patrick, the brother of Kasaris, revealed how she discovered that Kasaris intervened as county prosecutor to prevent his brother from being prosecuted for domestic violence against her and for a marijuana growing operation. She also has evidence that Kasaris was having a longterm extramarital affair with the prosecution’s key witness, Kathryn Clover, documented by over 100 pages of Facebook messages with his wife Susan. Bennett admitted that Clover, who was a paralegal for the prosecution, not really much of a fact witness as she was portrayed, had committed perjury but would not let her recant her testimony on the witness stand, even though she wanted to. 

Elsebeth Baumgartner also spent several years in prison due to legal corruption in Ohio. She discovered $1.4 million being misspent related to schools, and, as a lawyer, initiated federal racketeering lawsuits against those responsible. Kasaris got her indicted for intimidating a judge with the lawsuits — even though no federal judge ever ruled that her lawsuits were without merit. 

She believes she was targeted because she ran a blog exposing all the corruption. She said the corruption and cover-ups are so bad she’s been unable to get any justice, “There is no place to go to bring public corruption charges against a public official.” 

Brenda Bickerstaff, a private investigator, explained how as part of her job, she tried to talk to a witness in a high-profile case, and Kasaris threatened to have her indicted if she did. 

Bob Grunstein, who wrote “Bad Minds, High Places” about how powerful people in the criminal justice system in Ohio misused the system to attack him after he dared to criticize an Ohio judge, relayed how common the corruption in Viola’s case is. He said the problem is the corrupt are untouchable. “Any new rules and laws don’t matter since they won’t follow them, and no one will hold them accountable. No one will come forward because they’re terrified of what they’ll do to them. The federal courts protect their friends in the lower courts, because that’s where they came from.” 

Viola said his case comes down to four key facts: First, the prosecution has never turned over the $20 million it collected as “restitution” to the “victims,” big banks. Instead, it’s been used as sort of a “slush fund” for prosecutors, buying laptops, hotel rooms, etc. Viola calls it money laundering. Second, the FBI admitted it did not know about 10,000 documents in its possession — many that exonerated him — for 10 years. 

Third, the judge in his case, Federal District Court Judge Donald Nugent, sealed the records regarding Clover so Viola and others cannot use the evidence of her role to expose prosecutorial corruption in his case and others. And fourth, Kasaris used a Yahoo email account with his official signature on it to conduct official business, using it as a backchannel way to communicate with criminal defense lawyers. 

Mariah Crenshaw of the criminal justice reform organization Chasing Justice said the laws can be changed to stop this kind of abuse. She is proposing legislation that will allow prosecutors to be charged with criminal negligence for withholding potentially exculpatory evidence, and wants to allow defense attorneys to present their side to grand juries instead of leaving it exclusively to prosecutors.  

Viola wants Ohio Attorney General Dave Yost to suspend Kasaris and conduct a full investigation into his wrongful prosecution, as well as a DOJ investigation of Bennett. U.S. Sen. Sherrod Brown (D-Ohio) asked the FBI in November to enlist the Inspector General to investigate the FBI’s actions in Viola’s case, but so far there’s been no response. 

Maybe Viola will finally get somewhere because he’s gotten such a broad spectrum of people interested in his case. Even Black Lives Matters is involved. When you have people all across the political spectrum expressing outcry over a criminal case, perhaps the corrupt players

responsible for putting an innocent man in prison will finally be investigated — and exonerate over a thousand others in the real estate industry who were likely also wrongly prosecuted.

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Business

Doing Our Best in Handling What Was Unforeseen

Despite obstacles, there is a way to proceed and still feel good about all that you accomplish

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By now, everyone has mentally marked 2021 as one strange year. (Actually with Biden and Harris ‘leading’ the United States of America, it was already marked to be a disastrous year).

While we can’t guard against the unknown, we can do our best with what we have. Each day when you compose your to-do list and begin proceeding merrily down it, do you take into account what is likely to occur in the course of a day?

No matter how well we organize our lists and how productive we are in handling the tasks, unexpected obligations, interruptions, and other developments arise that still could throw us off.

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How do you react when you are humming along, and all of a sudden, you get an assignment from out of left field? Perhaps your boss has asked you to jump on a task or project immediately. Maybe a client calls and needs something ASAP. Maybe something gets returned to you that you thought was complete.

Stymied No Longer

If you are like most people, you might become flustered. The intrusion on your time and your progress means that you are not going to accomplish all that you set out to before the end of the day.

Is there a way to proceed and still feel good about all that you accomplish?  There is, and it involves first making a miniature, supplemental to-do list that accurately encapsulates the new task that you need to handle.

Why create this supplemental to-do list? It gives you focus and direction, reduces anxiety, and increases the probability that you will remain buoyant at the time of its completion and be able to turn back to what you were doing before the task was assigned.

If you don’t compose such a list, and simply plow headlong into the unexpected challenge that has come your way, you might not proceed effectively, and you might never get back to the to-do list on which you were working.

Anticipating the Unexpected

Unforeseen issues and tasks that arise represent more than intrusions on our time; they represent intrusions on our mental and emotional state of being. Some people are naturally good at handling unexpected situations. Most of us, however, are not wired like this. Interruptions and intrusions on our workday take us off the path that we wanted to follow, and tend to be at least momentarily upsetting.

Hereafter, when executing the items on your to-do list, proceed with the mindset that there will be an interruption of some sort. You don’t know when it is coming or how large it will be, but it will pull you off course. The key question is ‘Can you develop the capacity to maintain balance and equanimity in the face of such disruptions?’

The good news is that you can, and it all starts with acknowledging that the situation is likely to happen, devising a supplemental checklist to handle the new task, and as deftly as possible, returning to what you were doing.

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