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Sleep Number Corp. ($SNBR), Anthropic Issues Warning But Pursues "Value"-Maximizing IPO Anyway LOL, a Del Monte Foods Corporation II Inc. update + Gebbers Farms Files
⚡️Update 3: Sleep Number is Back to Giving Travis Kelce Nightmares⚡️
We’ve been covering the catastrophe that is Sleep Number Corp. ($SNBR)(the “company”) since last year when there were clear signs that things were getting increasingly nightmarish for the company:
You’ll recall that at that time the market had already been sh*tting all over the company’s stock: it was down 55% YTD by that point, trading at $6.66/share on the heels of a piss poor Q3’25 characterized by a HUGE miss on both the top and bottom line. Still, there was a minor bright side: the company’s stock was showing signs of recovery, pricing up from the beginning of November ‘25 to the time of that publication 👆. Commenting on the upswing, we wrote:
“The company’s stock has traded up significantly over the last few weeks; it is up around 79% from the mid-November low. Was the amend-and-extend the boost? Was it that plus the company’s announcement on December 2, 2025 that it had hired Amy O’Keefe as its full time CFO, effective December 8, 2025.”
We added, pointing to this chart 👇:
“Evidently, there are people out there who have growing confidence in new management’s turnaround strategy.
After taking one look at that slide 👆, we can’t say that we do.”
Our doubts proved warranted. The company subsequently reported its FY’25 and Q4’25 earnings and they … how do we put this? … f*cking sucked. We wrote about it here ⬇️ …
… when the stock was at $3.31/share and the company’s best hope was throwing a hail mary pass to the one and only Travis Kelce of football Taylor Swift fame. Yeah, about that, we wrote:
“Still, Sleep Number has at least one hopeful equity investor: Taylor Swift’s fiancé and NFL tight end, Travis Kelce, has become one of the company’s largest shareholders after entering into a three-year strategic partnership with Sleep Number in January ‘26. Kelce will be paid in cash and restricted stock units (three-year vesting, LO-f*cking-L); he also agreed to make open market purchases of the company’s stock. Assuming he’s already made some of said purchases and given the reported quarter, we’re guessing he’s happy he’s getting those sweet new football contract dollars as a hedge against his recent piss poor investing track record.”
LOL — that three-year vesting schedule gets funnier and funnier every time we read it. The comedy would compound if Tay-Tay ends up dumping his a$$ because he’s such a lousy investor, LOLOL.
Anyway, we finished that piece talking about the company’s December ‘27 maturity, indicating that the company didn’t have the luxury of that much time:
“The company has less than two years until it hits its December ‘27 maturity wall, but it likely will have to solve the liquidity issues and covenant breaches long before its debt reaches maturity. There’s no more time to snooze, 😴.”
And, indeed, nobody snoozed. The company had been huddling up with its lawyers and bankers and came back to the market with a credit agreement amendment to buy itself some time.
We wrote about it here:
The stock ripped on the news (back above $4/share before landing slightly over $3/share, 🙄, which was still below where it was at the time of our prior coverage). But, as we noted at the time, investors were clearly looking at the company’s deceptive headline number without reading the fine print. That there 👆”$55 Million of Liquidity” was a mirage. We wrote that the amendment:
“Pushes any application of the minimum liquidity financial covenant ‘…until the last Business Day of the first week ending after July 1, 2026,’ and thereafter the company must maintain $30mm from July 1, 2026 through and including October 3, 2026 and, beyond that, maintain $40mm. If you’re wondering how the company arrived at the headline $55mm figure in its press release 👆, this is it: it seems that, in addition to the new $25mm 2026 Term Loan, the company is counting the $30mm minimum liquidity adjustment.”
Slippery f*cks.
We continued:
“Does all of this mean that the company is out of the woods? No, we wouldn’t quite say that. Not to state the obvious but it has to execute on its business plan; it has to make sure consumers turn out for its products over the next several months. That means the company must take advantage of critical mattress-buying holidays, e.g., Memorial Day and July 4th. In other words, a lot of high-end customers benefitting from the K-shaped economy — these beds ain’t cheap — will need to free themselves from the tyranny of insomnia for this company to continue staving off a chapter 11 bankruptcy filing. Otherwise, absent some “strategic transaction,” we’re ultimately looking at an equitization of the growing amount of debt issued under the credit agreement (or a sale in chapter).
The goods news is that we’ll get some indication of how management is converting soon. Q1’26 earnings come out on May 12, 2026.”
Right, so how did earnings go? Take some ambien and brace yourselves: