š„That's NOT the Spirit (Johnny's Links #12)š„
Spirit Airlines, JetBlue Airways Corp., AI, Spanx, Sweetgreen & More.
Before we kick off this weekās set of Links, letās get a few things out of the way.
First, ICYMI, we dove back into the QVC Group Inc. (āQVCā) drama on Wednesday:*
Notably, the prefs continue their incremental climb higher so either existing holders are emboldened and are adding to their holdings or others are hopping on board (or both):
Second, you probably saw the headline that commercial chapter 11 bankruptcies were up again:
Indeed, according to Epiq AACER (āEpiqā), there were 644 commercial chapter 11 bankruptcy filings in April ā26, a 42% increase YOY (but a 2% decrease sequentially). Which is ā¦ uh ā¦ kind of interesting considering the cases that made their way into our universe basically involved QVC and a bunch of spitwads ā no offense to spitwads.
From our vantage point, the most interesting statistic out of Epiqās report was the number of chapter 12 filings. There were 62 of them in April, a 130% increase YOY and an 82% increase from March. The 62 filings amount to the highest monthly total since February ā20. It seems the Islamic Republicās closing of the Strait of Hormuz ā which handles one-third of the global fertilizer trade ā aināt exactly credit positive for US farmers.** Who knew?
Letās get to the Linksā¦.
*You can find previous coverage here and here.
**This is not a political statement, itās a factual one.
š„Link of the Weekš„
Weāre big nerds and private credit is all over the news and so we enjoyed this deep dive on GE Capital:
šWhat Weāre Reading (9 Reads)š
1. Airlines (Long Bankruptcies?). We all know what happened to Spirit Airlines.
The question now is: will it be the last airline to fall? Here is Gary Leff from View From the Wing talking about JetBlue Airways Corp. ($JBLU), among others.
2. Artificial Intelligence (Long Outcomes). Some good news coming out of the world of AI.
3. Artificial Intelligence (Long āOutcomes-Based Pricingā). It seems a lot of you are trying to get your arms wrapped around what artificial intelligence means for your business model. AI companies themselves are trying to siphon off some of your revenue. Per Semafor:
āAI companies will want a direct piece of new business lines they unlock and the margins they fatten. These new pricing models will be a proxy for how the spoils of an AI-powered economy get divided.
āThe arc of technology history will bend towards outcomes-based pricing,ā Jake Saper, a partner at venture firm Emergence Capital, told me this week.
One of Emergence Capitalās bets is ProsperAI, a healthcare startup that verifies patient insurance before procedures. Most hospitals currently pay by the phone minute for humans to do this. Prosper does it with AI agents and is moving toward charging per successful authorization ā outcomes, not inputs. āItās teaching buyers how to buy,ā Saper said.
Investment-banking startup Rogo charges the likes of Goldman Sachs and JPMorgan per user today but says itās exploring ways to take a cut of the M&A and IPO revenues it helps generate. As AI makes it profitable to chase smaller deals that were previously uneconomic, āitās upside for them and itās upside for us,ā Rogo President Rahul Rekhi said.
AI is even coming for the last great holdout of input-based pricing: Big Lawās billable hour. āClients want value, they are willing to pay for value, and the way that value is measured is ripe for evolution,ā said Rachel Proffitt, CEO of Cooley, the global law firm headquartered in Silicon Valley.
The legal industryās future may look a lot like its oldest-school heavyweight, Wachtell Lipton, which famously sends clients bills that simply say āFor Services Renderedā next to a large number. You hire Wachtell for an outcome ā a gold-plated M&A deal ā and pay accordingly.ā
4. Defense (Long Drone-based Warfare). This is relevant to basically nothing in the restructuring space ā itās an article about how Ukraine is on the cutting edge of using drone technology to thwart Russiaās territorial ambitions ā but we, being the degenerate creatives we are, canāt help but think itād be pretty damn salvage if someone ā¦ cough, Tom Lauria ā¦ had a pet Droid TW 12.7 sitting in the corner of a conference room for optimal negotiating leverage.
āJokesā aside, if you havenāt been paying attention to what Ukraine has been doing in its war, you might want to start. Conventional warfare as we know it is a thing of the past.
5. Feels (Long Vibescession). We, among others, have been commenting that things just feel like they should be busier for RX professionals. Well, counterpoint:
6. Private Equity (Short Management Services Organizations?). And we were kind of looking forward to the day when Apollo told Latham & Watkins LLP to charge another arm of Apollo more money so that Apollo 1 could make greater returns (even if its at the expense of Apollo 2, someone elseās bonus so š¤·āāļø). It seems there are some politicians who aināt too keen on PE shops owning law firms. Per The Wall Street Journal:
āPrivate equity has barely begun investing in law firms, but the backlash has already started.
Lawmakers in three states are considering bills to make it harder for buyout firms and other corporate investors to buy law practices, a burgeoning investment strategy that was long off limits for private equity.ā
They continue:
āLaw is a new frontier for private-equity investors. Buyout firms for decades were put off by rules against nonlawyersā controlling legal practices and other logistical barriers to investment.
But while it remains forbidden for private equity to directly own law firms in almost all states, firms have developed workarounds to control practices without violating the rules.
Private-equity investors have realized that the same structure that allows them to invest in medical practicesāthe management-services organization, or MSOācan be repurposed to invest in legal practices.
The interest is on both sides, as more lawyers reconsider their commitment to professional autonomy. The prospect of artificial-intelligence toolsā reshaping the profession has convinced some firms to seek outside capital to invest in technology and operations.ā
Yeah, sure. The interest is purely based on investing in tech, š.
Related:
7. Restaurants (Short Listeria). Hard to get sick when you stay away from over-priced salads like the ones they be serving at Sweetgreen Inc. ($SG). This š© was mentioned back in Links #2 ā¦
ā¦ and ā¦ ā”ļøSHOCKERā”ļøā¦ continues to turd. The chain reported earnings yesterday that featured same-store sales ā¬ļø 12.8%, including an 11.2% ā¬ļø in traffic. And we thought Q4ā25ās 11.2% same store sales decline was bad! But donāt worry guys. According to CFO Jamie McConnell, same-store sales will only be down 4% in Q2ā26. Howās that for guidance? The stock market be like āmehā: the stock is down roughly 1% YTD as it sits mired in no manās land, up off the $4.49/share 52-week low but down considerably off the $18.63/share 52-week high. One consolation? Itās not the only fast casual chain performing like dogsh*t:
SG also blamed weather for its travails which is weird because Johnny was in New York City during the blizzard and he had no qualms making some poor guy ride a bike in end-of-days conditions just so he could get a subpar salad.
8. Tariff Claims (Short Handshakes). In Wednesdayās updated coverage of Sleep Number Corp. ($SNBR), we noted how the company intends to monetize its $4.25mm tariff refund. It had better watch out. Apparently thereās a bunch of retrading aholes out there. Here is an article about how Oaktree Capital Management is suing BJās Wholesale Club Holdings Inc. ($BJ) for reneging on a deal to sell its rights to ~$29mm in tariff refunds at 70c on the dollar.
9. Tights (Long GLP-1s?). Itād be pretty funny if Spanx ends up being a victim of GLP-1s as people no longer need assistance sucking in their sh*t.
š§What Weāre Listening Toš§
Speaking of Spanx, we thought this origin story was pretty interesting:
šŗ What Weāre Watching šŗ
šResourcesš
We have compiled a list of a$$-kicking resources on the topics of restructuring, tech, finance, investing, and disruption. š„You can find it hereš„.