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Canoo spent double its annual revenue on the CEO's private jet
- mikeyouse 3y agoWhere is the BOD? The amount of self-dealing and conflicts of interest that everyone allows is just absurd.
- monero-xmr 3y agoI also love when startups brag about headcount. You know what's impressive? Revenue, followed by profit, and also profit per employee. Having 500 people and no revenue leads to the graveyard.
- tadfisher 3y agoNo, it leads to layoffs, a statement about "optimizing operational costs", and a bump in valuation in today's weird market.
- lenerdenator 3y agoThe market isn't weird; it's working exactly as intended: Do whatever it takes to make the number at the bottom of the page bigger than what people predicted it would be at the start of the quarter. If that means screwing some people's career trajectories, do it. If it means parting out divisions of the company that had strategic value, do it. If it means allegedly murdering a whistleblower, do it.
- tsunamifury 3y agoThis is interesting because it doesn't mean that actually, it means if you want to make that choice the market will reward you now, and the market may not be focused on any one specific strategy. You can make other choices.
- baq 3y agoEnd of ZIRP was supposed to deal with shit like this. Looks like money is still too cheap. I've seen people saying rates are going higher from here back in 2022. While this isn't my base case, it certainly isn't impossible.
- moomoo11 3y agoRates should go to 15% without bailouts. Anyone who survives that deserves all of the rewards.
- cm2187 3y agoThat may not include the US Treasury.
- lotsofpulp 3y agoWhat would stop the US Treasury from printing as much cash as needed to pay its debt?
- cm2187 3y agoInflation
- lotsofpulp 3y agoI would bet on the US federal government printing money to pay debts rather than default.
- onychomys 3y agoI should quit my job and become a CEO, seems like a pretty sweet gig.
- ghaff 3y agoThe money would probably be nice but I suspect a lot of people here would hate the amount of travel and the degree of scheduling morning, noon, and night that the CEO of any size of company has.
- blackhawkC17 3y agoMost people who say, "I would quit my job and do that; it seems easy" won't even survive what they claim they would have done. I mean there's a reason they didn't do it, because they couldn't.
- nytesky 3y agoWow, it’s bad enough if they were NetJet fees. This is WeWork level sketch: “ Canoo reimburses Aquila Family Ventures, an entity owned by the CEO, for use of an aircraft” This is a PUBLIC company??
- blackhawkC17 3y agoSuch deals are reasonable under some circumstances. For example, Tesla pays SpaceX for Musk's travels on the SpaceX jet (whenever he travels for Tesla-related business). But definitely not for a company with just a few $100k in annual revenue that's teetering on bankruptcy. Not surprised it's a SPAC stock... Edit: Upon digging; I discovered that this CEO has invested $230 million+ in Canoo (from personal funds he made selling his previous company)...this article is almost a nothing burger.
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- nytesky 3y agoIt’s a public company, he can’t treat it as his private company even if he invested $230M and it’s only worth $150M now and he’s trying to make up for his losses
- diggan 3y ago> Under a deal reached in November 2020, Canoo reimburses Aquila Family Ventures, an entity owned by the CEO (Tony Aquila), for use of an aircraft. In 2023, Canoo spent $1.7 million on this reimbursement — that’s double the amount of revenue it generated. Canoo paid Aquila Family Ventures $1.3 million in 2022 and $1.8 million in 2021 for use of the aircraft. I'm surprised there are any employees left at the company. If I saw that the CEO is actively funneling funds out of the company where we work, to their family's company, I'll be long gone.
- justinclift 3y ago> I'll be long gone. Or maybe it's a case of "time to renegotiate my salary with that in mind". ;)
- jonplackett 3y agoWework vibes
- Workaccount2 3y agoA former president only stayed at properties owned by his company, billing the government millions in extra overhead. His voters love him.
- markstos 3y agoIt’s OK because Elon uses a private jet and look at Tesla!
- mypalmike 3y agoCorporate cargo culting.
- gravescale 3y agoI worked for a company under a big corporate. Or they thought they were. Lots of Big Business Talk, earnest Reports (not sure if they were TPS but they might as well have been) and lots of Management Structuring, no actual products except for things already made by acquisitions. It reminded me strongly of the Mattel boardroom in Barbie.
- justinclift 3y agoGive it a few years and Elon may actually be able to use Starships for travelling around. Not sure how that'll look on the financial statements. ;)
- lenerdenator 3y agoI'm beginning to think the vast majority of corporate governance is a facade and that this is just a way to blow millions of dollars with no real accountability.
- passion__desire 3y agoConsumption needs to happen somewhere so why not create sinks (ceos) so that our work (source) ends up serving the rich.
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- eszed 3y agoI slightly mis-read the headline. Here's what's going on: >Canoo reimburses Aquila Family Ventures, an entity owned by the CEO, for use of an aircraft. In 2023, Canoo spent $1.7 million on this reimbursement. CEO owns a plane. CEO uses the plane (for business, one presumes). Business reimburses CEO for plane. That looks like a poor use of funds, but not necessarily self-dealing? I mean, in their position he should probably be flying coach - maybe he's so good that he's totally worth spending seven figures for his travel (though I doubt it) - but it's technically no different than reimbursing any other travel expense. Better system: they could reimburse the minimum airfare, and he could cover the difference himself. Everyone has that figured out for us peons, when we request a more convenient flight. (Want to bet they imposed that on their employees?)
- ryandrake 3y ago> Better system: they could reimburse the minimum airfare, and he could cover the difference himself. Everyone has that figured out for us peons, when we request a more convenient flight. (Want to bet they imposed that on their employees?) I'd absolutely be willing to bet the deal that regular employees get is worse-than-or-equal-to what you described. Most companies I have worked for do not even let you choose. If you are doing business travel, you use the company's preferred travel agency, and fly on the flight you're given, even if you could independently find a business-class flight just as cheap.
- lanstein 3y agoCan you tell me what travel system allows that?
- eszed 3y agoI've had that in academia, and in my current (medium-sized) company, where rules and processes aren't as stringent as I know they are in BigCorps. My partner works for a consultancy firm (where she, in part, arranges travel for various people), and they do that too. I guess I assumed that (very fair-seeming) practice is more widespread than it actually is. My condolences to all of you. Edit: I just remembered a totally silly travel situation during my academic career. The school sent me to an academic conference in an interesting location, and I wanted to stay for an extra week to do some touristing. (It was during summer vacation, and golly do I miss those.) No one had any problem with it, and they told me standard practice was for me to call the airline and pay the $250 (or whatever it was) change fee. No problem, until I noticed that tickets with the new return date would be something like $400 less than the original dates. No tickets had yet been purchased, so I suggested that they buy me those dates directly: everyone would win. Except... "Sorry, we can't do that." Huh? "Travel must be +/- 2 days of the conference dates." I presented the situation to my department chair, hoping for an intervention, but she sighed, and said that those people were impossible to deal with. "But, it's the end of the fiscal year, and I have some extra budget [somewhere], so submit a reimbursement form for the $250, and I'll sign it." Silly, right?
- gumptionary 3y agoTony Aquila is the CEO of both companies - Canoo and Aquila Family Ventures. I'll never understand why it's okay for CEOs to have multiple concurrent jobs, while one of the biggest fervors of the pandemic was when employees were found to have... multiple concurrent jobs.
- efnx 3y agoNot sure why you’re getting downvoted as this is a legit question I’d like answered.
- lionkor 3y agoYeah, but answered by who?
- ryandrake 3y agoWell, they are CEOs, and are therefore better people than the rest of us workerbees and get to operate under totally different rules.
- ThrowawayR2 3y agoThis but unsarcastically. Linux Torvalds, Anders Hejlsberg, and other elite developers also operate under totally different rules than worker bees too. No, we're not on the same footing as a CEO candidate or 10x developer. Anyone who is sure as heck wouldn't be wasting their life collecting karma points on HN.
- pbhjpbhj 3y agoI suppose you believe all these billionaires are self-made and that having a handout of hundreds of thousands of dollars, and a network of very rich people you know to make investments, made no difference. 'Anyone can succeed through hard work'. The really rich CEOs collect imaginary karma points on X ...
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- blackhawkC17 3y agoIf the reimbursements were solely for corporate travel, it might not be a concern. The CEO here sold his previous company for $6.5 billion [1], so he already owned the jet before starting Canoo. The company reimburses him for corporate travel on it. What's concerning is that Canoo is stacking big losses and living on the edge...it seems like excessive spending for a company that hasn't even made a dime of profit. But hold on, this same CEO has spent over $230 million(!) buying Canoo stock from his personal funds [2], so he is significantly in the red no matter how much he gets reimbursed for air travel. Always dig into the details and avoid getting suckered by clickbait... 1- https://www.reuters.com/article/idUSL1N11J0PS/ https://www.reuters.com/article/idUSL1N11J0PS/ 2- https://www.secform4.com/insider-trading/1399053.htm https://www.secform4.com/insider-trading/1399053.htm
- Climato 3y agoYou need at least 400 Million to enter the car manufacturer market. The investment does sound absolutely reasonable at this point.
- Solvency 3y agoCan someone explain why people try to make new cars from the ground up, rather than "fork" a base platform from GM/Toyota/KIA/whoever with a different design and little features? This happens in literally every other market and industry. hell, just look at PCs and laptops. Like why can't a Canoo or Rivian license a base EV platform and come up with their own chassis design, infotainment system, and other little things to differentiate themselves? why does it HAVE to be all or nothing?
- JoshTriplett 3y agoHow enthusiastic do you think those companies would be if someone came to them wanting to license their design perpetually and use it to compete with them? And even if that is something they're willing to do (which they might be), the terms would then make it difficult to ever do something that isn't based on that platform, since the manufacturer whose design is licensed would likely object that the new design was still based in some way on the old one. The analogy in the PC world would not be "license a design from an ODM like Compal or Quanta", it'd be "license a design from Dell or Lenovo". That in itself suggests a potential market: perhaps there's room for an ODM in the automotive space?
- usrusr 3y ago> Under a deal reached in November 2020, Canoo reimburses Aquila Family Ventures, an entity owned by the CEO, for use of an aircraft. Any guess how much of that money actually went into operating the aircraft, and how much was skimmed by the CEO? Madness either way, but we can't have it filed under the wrong kind of madness, right?
- bryanlarsen 3y agoIf he's skimming, it's not enough to immediately stand out. They reimbursed $1.3 - $1.8 million per year, which is about how much it costs to operate a private jet.
- bombcar 3y agoA random search indicates that the amount is well within annual parameters: https://www.libertyjet.com/jet-ownership-costs.aspx?jetType=IAI-1126 https://www.libertyjet.com/jet-ownership-costs.aspx?jetType=... Note that the capital outlay for a jet is a minor portion of the total operating budget over the years. Fuel and crew is the major component especially with smaller jets.
- causi 3y agoLoss to revenue ratio of 350 to 1 Well, shoot. I thought the truck looked really cool.
- tim333 3y agoThey recently got a big order which is probably not reflected in those numbers. 9,300-vehicle binding order to Kingbee https://cleantechnica.com/2024/01/20/canoo-delivers-first-of-9300-electric-vans-to-kingbee/ https://cleantechnica.com/2024/01/20/canoo-delivers-first-of...
- dgrin91 3y agoThe headline is relatively clickbait-y. Its double their revenue because their revenue is basically 0. Their actual expenses are hundreds of millions, of which this 1.7 million is a drop in the bucket. Once their upfront expenses are paid they will (presumably) be making hundreds of millions/billions in revenue, which means this 1.7m is not particularly important. You can talk about standard complaints of CEOs with private jets, and I'd probably agree with you here, but there isn't anything particularly egregious here.
- brandall10 3y agoIt’s also worth noting the projected revenue for 2024 is 50-100M.
- ricardobeat 3y agoI also project earning $20M from my yet-to-be-built SaaS platform in 2025.
- brandall10 3y agoOkay. This is a publicly traded company with a product burning through a multiple of that annually.
- bdcravens 3y agoFrom their recent 10K filing: "Our management has performed an analysis of our ability to continue as a going concern and has identified substantial doubt about our ability to continue as a going concern. If we are unable to obtain sufficient additional funding or do not have access to additional capital, we will be unable to execute our business plans and could be required to terminate or significantly curtail our operations."
- vidarh 3y agoAlmost any startup will have periods where there will be "substantial doubt about our ability to continue as a going concern" if they are "unable to obtain sufficient additional funding". This is meaningless when looking at a startup without also looking at whether their burn rate is abnormal relative to how much they raised, and whether or not they're meeting their targets.
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- KingOfCoders 3y ago"Family Foundation" I wonder when the public wakes up and understands that rich people don't own anything "personally" so you can increase VAT and income tax just as much as you like to tax the rich.
- tromp 3y ago> avoid the same fate as other EV startups, like recently bankrupt Arrival. Talking about other EV startups, I wonder how much longer Aptera can remain in a state somewhere in between not having gone bankrupt and not having started production yet. They do seem to be forever inching closer toward the latter [1]. [1] https://electrek.co/2024/04/01/aptera-showcase-solar-ev-tech-uae-as-preps-first-production-intent-builds-video/ https://electrek.co/2024/04/01/aptera-showcase-solar-ev-tech...
- throwawaymaths 3y agoAccording to their CFO who authorized the CEO to make the statement (kind of a big deal for legal reasons) aptera makes breakeven by making 6k cars a year, so they have 7 years number of preorders. Even assuming a low preorder execution rate at like 20% it seems like they will be good to go.
- arange 3y agothe ceo invested $230M+ of his own money into the company. if the guy wants a market-rate jet benefit, give the man the jet.
- alberth 3y ago> The company generated $886,000 in revenue Plenty of companies spend more than that on just AWS egress fees. I’m not saying money spent on a private jet is right or wrong. But when a company is not profitable, you could compare this to anything. Like the headline could have easily been “Canoo spent double its annual revenue on AWS egress fees”
- acdha 3y agoAWS egress fees serve a legitimate business function. They might be higher than what they could be with optimization but they go towards a business service. What we’re seeing here is more like if those egress charges were due to him hosting the business on his own cloud service even though it cost more.
- bombcar 3y agoDid it cost more? From a quick search the amount seems reasonable for "years worth of private jet use". If CEO travel is a legitimate business function, you're now arguing "AWS vs server in your closet" kind of questions and haggling on price.
- acdha 3y agoYes, it did. The question is whether there’s enough value generated by taking a private jet instead of normal plane flights, which is unlikely to be the case for a business losing money.
- denton-scratch 3y agoThe boss already owns the jet. Now he makes his company rent it from him, so he can zoom around in the plane he already owns, and that he would be zooming around in even if he weren't the Canoo boss. I don't think a company should be paying for the boss's jet, if the company isn't near break-even. I'd say the boss doesn't believe the company has legs, and he's extracting cash while he can.
- bombcar 3y agoReplace "jet" with "time" and the argument still holds. Why should the CEO get a salary if the company isn't near break-even?
- Schattenbaer 3y agoCanoo the car company, not Canoo the welcome-to-Canada app. In case you are confused by the headline, as I was
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- snakeyjake 3y agoI love startup culture. The CEO of my company flies commercial, and we've have thousands of employees, have been around since the 1940s, actually ship products, and make a shit-ton money. But startup CEOs leading companies with 800 employees that can't ship hardly anything are movin & shakin so startupfully between plays and deals that they ain't got no time for that. $1.8 million per year for travel is $5,000 per day. That's more than a day-of round-trip first-class flight on ANA ($20k today) from NYC to Tokyo every week.
- bombcar 3y agoFirst class flights are completely different from potato class, and private jets are so far above first class it's really hard to exactly explain how much.
- rrrrrrrrrrrryan 3y agoYeah I don't think people realize that flying private means you don't have to go through security. You don't even have to go into the airport. You just drive up and walk onto the plane. For executives in a tight race with hundreds of millions of dollars on the line, where a schedule slipping even 1 day can matter, sometimes flying private does actually make financial sense.
- snakeyjake 3y ago>For executives in a tight race with hundreds of millions of dollars on the line, where a schedule slipping even 1 day can matter, sometimes flying private does actually make financial sense. I'm not an executive. I would never disgrace my ancestors or embarrass my descendants by getting an MBA. But I have been around the block a few times and if you're in a situation where missing a flight will torpedo a "hundred million dollar" deal you're a shitty businessperson. It has been my experience that the best way to keep a schedule from slipping is for executives to keep their mouths shut, cloistered in their office, waiting for an assistant to build some slides for them.
- bananapub 3y agoon the one hand, it's obviously stupid and a preposterous waste of resources, on the other hand, it's a moral good to incinerate VC money if the VC are so fucking stupid as to give it to idiots like this guy. so who's to say which is better.