Lowlights Of The Year We commemorate some of the darkest and funniest business and economic blackspots of the year.
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Lowlights Of The Year

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Lowlights Of The Year

Lowlights Of The Year

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CARDIFF GARCIA, HOST:

Welcome to the 2018 lowlights of the year awards ceremony.

STACEY VANEK SMITH, HOST:

First annual.

GARCIA: So today on the show, we thought it would be appropriate to commemorate some of the lowlights of the year in keeping with so many of the year's themes. So we are handing out awards for some of the silliest or most outrageous or just the dumbest stuff...

VANEK SMITH: Stuff.

GARCIA: ...That people and companies have done this year plus awards for a couple of just plainly weird things we noticed.

VANEK SMITH: More stuff after the break.

(SOUNDBITE OF MUSIC)

VANEK SMITH: The first indicator lowlight award of the evening is the stop trying to do the right thing; you lack the practice award.

GARCIA: And the winner is Pepsi.

(APPLAUSE)

VANEK SMITH: Whoo, Pepsi. So Pepsi owns Frito-Lay, which makes Doritos. And earlier this year, it was revealed that Pepsi had considered introducing a low-crunch type of Doritos for ladies because according to Pepsi CEO Indra Nooyi, women, quote, "don't like to crunch too loudly in public."

GARCIA: Got to get those low-crunch Doritos.

VANEK SMITH: Demure Doritos.

GARCIA: Yeah, the comedians and talk show hosts had a fun time with this one.

(SOUNDBITE OF TV SHOW, "THE ELLEN DEGENERES SHOW")

ELLEN DEGENERES: What woman doesn't want a crunchy chip? Who's complaining about the - if your chip isn't crunchy, it's not a chip. It's a wet potato.

(LAUGHTER)

DEGENERES: After Pepsi makes a chip that isn't crunchy, they're going to make a soda that's not wet. That's their...

(LAUGHTER)

DEGENERES: They're really on it.

VANEK SMITH: This just feels like a wave, like, silencing women with potato chips.

GARCIA: Oh, yeah, I hadn't thought of it like that.

VANEK SMITH: Am I looking at this the wrong way? And thankfully, you know, Pepsi thought the better of it.

GARCIA: (Laughter) Yes, thankfully indeed. The second lowlight award of the night is for the obscurantist financial metric of the year.

VANEK SMITH: Cardiff, you cannot give awards that don't make any sense. Obscure - what?

GARCIA: Obscurantist - you'll understand after I explain what it is...

VANEK SMITH: OK.

GARCIA: ...Because this award goes to WeWork, the company that leases a space, adds a pingpong table and then rents you a beer-stained desk. When WeWork was raising money earlier this year by selling bonds, it reported to the bond buyers a metric called community-adjusted EBITDA.

VANEK SMITH: EBITDA - so this stands for earnings before interest, taxes, depreciation and amortization. Basically this is just a standard way to report a company's profits without having to take into account things like taxes and interest payments which don't necessarily really have to do with how good the company is at making money.

GARCIA: But community-adjusted EBITDA - now, that's new.

VANEK SMITH: Let's get the people involved.

GARCIA: This measure of a company's profitability doesn't just take out things like interest and taxes. It also takes out a bunch of stuff necessary to run most companies, things like sales and compensation for certain employees, marketing and just other administrative expenses that, yeah, go with running a business, and then adding the word community probably because it sounds so warm and fuzzy.

VANEK SMITH: Next indicator lowlight award goes to business model of the year. This is a very special one. And it goes out to MoviePass. INDICATOR listeners might recall that MoviePass is the company that until earlier this year was offering monthly subscriptions for $9.95. I mean, this was an amazing deal because these subscriptions would let you go to as many movies as you wanted to in the theater, and MoviePass would pay for the ticket.

GARCIA: In other words, the MoviePass service was designed to lose money the more it was used because if you saw more than one movie per month, your subscription had already paid for itself, and MoviePass was now paying for the difference.

VANEK SMITH: Now, MoviePass is owned by this company called Helios and Matheson. It is a company that trades on the stock market. And just to give you an idea of how badly MoviePass has damaged its owners, CNBC just reported that the Helios and Matheson CEO last year was paid with stock in his own company, which at the time was worth $7.25 million. That stock, that same exact amount of stock, is now worth less than $50.

GARCIA: Yikes.

VANEK SMITH: I feel so bad. That is rough.

GARCIA: This was actually my favorite corporate story of the year, though I have no idea why. The MoviePass business model was basically just like an aggressive transfer of funds from Helios and Matheson shareholders and I guess whoever the company borrowed money from directly to the film industry. It's like this really strange way to subsidize art, like Robin Hood but in a capitalist context. But I guess those of us who like movies should just be grateful.

VANEK SMITH: I love this frame.

GARCIA: Right.

VANEK SMITH: They were like the Robin Hoods of the movie industry. It's wonderful.

GARCIA: OK, moving on, the next lowlight of the year is actually a little sad. It's the Toys R Us award for a once-iconic American company that has been managed increasingly into senescence.

VANEK SMITH: Senescence.

GARCIA: Yes. You like what I'm bringing to this episode.

(LAUGHTER)

VANEK SMITH: Did you get a thesaurus for Christmas early, Cardiff?

GARCIA: And the winner of this award goes to General Electric.

(APPLAUSE)

VANEK SMITH: This year, GE had to take a massive $23 billion loss because of its terrible purchase of this French company Alstom a few years ago. And it cut the dividend it pays to shareholders to 1 cent per share. Plus, GE also fired its CEO after just 14 months on the job even though the company's problems were definitely the result of decisions made by his predecessors. GE's stock price is down about 75 percent in the last two years. And the company just is not what it used to be.

GARCIA: Next, the award for totally avoidable bonehead move of the year.

VANEK SMITH: Now, bonehead - this is a word I know.

GARCIA: This one - everybody gets that one right.

VANEK SMITH: This one I got. I got you.

GARCIA: The award goes to Tesla CEO Elon Musk. Musk went on, like, a Twitter tirade in August, and he tweeted the words funding secured. He was claiming that he might take Tesla private. Now, to take private is when one person or one group of investors buys all the shares of a company that trade on the stock market. And so the company then becomes a private company. And a private company does not get the same level of scrutiny from regulators that a public company gets. And so tweeting funding secured was how Elon Musk announced to the world that he might take Tesla private and that he already had the financial backing from investors so that he could afford to do it.

VANEK SMITH: Except that he did not have the backing. The Securities and Exchange Commission charged Musk with fraud, and Musk ended up losing his position as chairman of Tesla's board to settle the charges, though he was able to stay on as CEO. And amusingly enough, Tesla announced fantastic third quarter results in October, and the stock price is up by a lot since then. So maybe this year's biggest avoidable bonehead move did not make that much of a difference.

GARCIA: Indeed. But still I think the lesson is don't tweet if you're a CEO with impulse control problems. Put the phone down.

(SOUNDBITE OF MUSIC)

VANEK SMITH: And, Cardiff, our final award of the night goes to the tackiest new labor trend. And it goes to...

(SOUNDBITE OF DRUMROLL)

VANEK SMITH: ...Workplace ghosting. This was first reported by the Federal Reserve Bank of Chicago. It's apparently a new trend. Apparently there are so many jobs in the market that workers can just, you know, leave and get a new job pretty easily. And this has led to something called workplace ghosting.

GARCIA: Where you don't even give any notice of your leaving.

VANEK SMITH: No.

GARCIA: You just ghost. You're gone.

VANEK SMITH: No uncomfortable conversation with your manager, no clearing out your desk. Or maybe you do that stealthily. It's just one day you're there, the next day nothing. And no one can reach you.

GARCIA: I don't encourage this behavior. But at the same time, like, workers have had it so tough the last, you know, decade or so that like...

VANEK SMITH: Oh, yeah.

GARCIA: ...If this is a sign that they're getting a little bit of power back from companies, I think I'm OK with it.

VANEK SMITH: They're just like, you know what, company? You figure it out.

GARCIA: Peace.

VANEK SMITH: They'll get it (laughter). Not just for Tinder dates anymore.

GARCIA: So that's it. That is our awards ceremony. What a nutso year it's been. And we really hope you get a restful break this holiday season because let's face it. Next year's going to be even crazier.

VANEK SMITH: THE INDICATOR's produced by Constanza Gallardo and Darius Rafieyan and is edited by Paddy Hirsch. Our intern is Echo Wang. And we're produced by NPR.

(SOUNDBITE OF MUSIC)

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