It’s earnings season and I’ve been following some of the earnings news (I’ll post on some of the other Utah companies next week). And earnings season has been an objective disaster for a lot of these Utah companies. Traeger, Purple, and Owlet all had recent layoffs – Owlet let 74 employees go which was likely a large chunk of their headcount.

As I mentioned several weeks ago, I have significant doubts that this company will make it. They announced on the call today that they breached their debt covenants and their line of credit / revolver was significantly reduced but that they’re working with their bank. They burned through $30MM in Q2 and I expect them to continue to burn cash for the rest of the year. I just don’t see how they’ll overcome these issues without some type of extreme measures as part of a last-ditch effort. Lenders won't want to give them money.

To make matters worse, the president of the company resigned and it was clear on the last earnings call that Kurt (founder and CEO) really isn't the one calling the shots. And I also saw a scathing LinkedIn post by a former employee talking about how terrible that company is. Other former employees mentioned that they were in therapy as a result of the terrible environment at Owlet.