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Breaking: SurfStitch in “Total Collapse”

Derek Rielly

by Derek Rielly

Shareholders "likely to face complete loss on their investment."

How do you solve the problem of a biz built on what is essentially a solid foundation but ruined by a “failed acquisition strategy” and facing various law suits and an investigation by the Australian Securities and Investment Commission?

Hoist a white flag and call in the administrators. It’s a way a company like SurfStitch that ain’t doin’ so well, maybe it has a viable biz but needs a little time to steady the ship, can keep creditors at bay while an administrator works out what the hell it should do, if it’s viable and so forth.

Although, as reported today by The Australian,

“The long-troubled surf and sports products online retailer SurfStitch has collapsed into voluntary administration, ending the public life of one of the worst floats on the market in recent years, leaving its shareholders likely facing a complete loss on their investment.

“SurfStitch has the ignominy of being one of the worst performing floats in recent times. Set at an IPO price of $1 when the company floated in late 2014, the shares soon crashed following a string of profit warnings, class action law suits, failed acquisition strategy and then the shock loss of one of its co-founders and co-chief executives Justin Cameron soon after its float.

“The long-troubled surf and sports products online retailer SurfStitch has collapsed into voluntary administration, ending the public life of one of the worst floats on the market in recent years, leaving its shareholders likely facing a complete loss on their investment.”

“The cracks started to show in SurfStitch soon after it floated on the ASX, with the company plunged into turmoil in March 2016 when Mr Cameron quit via a one-line email to the board, as he joined forces with a private equity firm to launch a possible takeover of the group. SurfStitch, led then by chairman Howard McDonald, had been scrambling since to regroup executives and integrate the businesses that SurfStitch bought up since its $83m float in late 2014.

“In 2015, SurfStitch kicked off an acquisition spree, as it extended its reach beyond online retailing of surf and sports goods – which was its original business model – to buy up a host of other companies. SurfStitch paid $23.7m for specialist global water board distributor Surf Hardware International and prior to that paid $21m for Stab, a leading online surf content platform, and surf forecasting network Magicseaweed. It also bought Garage Entertainment and Production for $15m.

“Many of those deals failed to deliver the returns SurfStitch had hoped for.”

“Earlier this year, law firm Quinn Emanuel filed an open class action in the Supreme Court of Queensland for anyone who bought or held shares between August 27, 2015, and June 8 last year included in the litigation. It represents a potential $100m lawsuit.

“The plaintiffs allege Surfstitch was trading at a loss in August 2015 but announced that it was expecting EBITDA to double in the 2016 full-year. Surfstitch allegedly covered up the loss by entering a series of copyright licensing deals with surf technology group Coastalwatch and Three Crown Investments.”

A meeting on September 5 will update shareholders on the progress of the administration and what sorta cut they might get out of their seven cent shares.

Bloodbath: Great White Fever Comes to Cape Cod!

Derek Rielly

by Derek Rielly

Terror in New England as Great White numbers soar!

What travellers Great Whites are. After establishing buoyant new colonies in Western Australia and around Ballina on Australia’s east coast, as well as in San Clemente ninety clicks south of LA, the Great White has now made a show of its arrival in New England.

Over the past few days around Cape Cod, a fisherman has filmed a breaching White, a SUP pilot was attacked in three feet of water and two surfers “feared for their lives” and the ocean was tinted a gorgeous red when a Great White hit a seal twenty metres off the beach.

Watch the breaching White here (and read the Boston Globe’s account of the event here.) The skipper Hap Farrell says “This has happened to seven or eight other boats in the last two to three weeks. I just happened to catch it on video.”

The panic as a White hits a seal here. (Nisi Schlanger, who was surfing for the first time, said, “I felt like the shark’s gonna pull me in from my legs or something.  “People [were] yelling, ‘Get out the water! Get out the water!’ I thought I was dead.” He said there was “blood everywhere” as the shark ate the seal.)

And read about the son of a bitch on an SUP who was hit in shin-deep water, here. 

In response to the sudden activity, the usual calls for a cull have been thrown out. As reported by the New York Post:

A shark attack on a seal in Cape Cod has prompted a call for a controversial system that would hook and kill great whites.

Ron Beaty, commissioner for Barnstable County, believes the “shark hazard mitigation strategy” will help protect swimmers from potential shark attacks, the Boston Herald reported Wednesday.

“This shark, that attack that got videotaped off Nauset, that was very close to shore and very easily could have been a small child and not a seal,” Beaty said. “It’s very easy for these sharks to mistake a person for a seal. They’re just looking for something to eat. God forbid it’s somebody’s child, and by that time, it’s too late. We can’t wait for that.”

Under Beaty’s proposal, which he said has worked in South Africa and Australia, baited drum lines would be set up along popular beaches. Great whites that are found hooked would be shot to death, their bodies tossed out at sea.

Do you like the idea of Great White bodies being tossed out at sea? Or does it make you so mad you feel like going straight to Facebook and creating a page about it?

My favourite quote re: these events goes to the scientist Gregory Skomal who told the Boston Herald: “When you have overlap with humans, you do get the potential for these interactions, you know, a shark biting a person.”

Jordy Smith: “The Big South African!”

Chas Smith

by Chas Smith

Jordy Smith is set to win Trestles. Set to win Trestles big!

I read a wonderful piece on the World Surf League’s website this morning about Jordy Smith, the big South African, and his special connection with Trestles. Did you know that Smith, who clocks in at 6’3/190, has won the event two out of the last three times?

Amazing and you should certainly read the rest here.

I, for one, had forgotten but the big bru’s special relationship with that wave could easily solidify his grasp on the top slot and made it very difficult to derail his all kinds of husky momentum.

Wonderful. And it the World Surf League story the phrases “big South African” “big bru” and his height/weight were all included, which gave me slight pause (husky momentum this author’s own addition).

Oh of course I was kidding when I blamed the League of fat shaming Jordy with their web ad “194 lbs of boom” but it is impossible to read his name in any surf media without also seeing the words “big South African” attached.

Do you think Jordy likes it?

But more importantly, what if there was one phrase attached permanently to your name? What would it be?

I think mine would be “reed-like Chas Smith.” Or maybe “unfortunately trim Chas Smith.”

But what about you? What’s yours? And be honest.

Just in: Smoking weed is fun!

Chas Smith

by Chas Smith

And here's how you get some!

And how wild is it that we live at the beginning of the end of prohibition? Marijuana is on pace to be completely legal in most western countries over the next decade or so. In the U.S. more states than not have legalized medical usage and a good handful, California included, have voted in full recreational as well.

Yet, if one read only surf media, it would appear that marijuana is still the Great No No. A closeted and frowned upon vice of low-lifes and miscreants. Ain’t that even more wild? Surfing used to have a well-established counterculture bond with weed that extended deep into the 1980s. Maybe it was the 1990s economic boom that saw surf brands become publicly traded. I am not economically inclined so have no real understanding.

But the surf media? What a bunch of lily-livers! The Inertia, for example, regularly beats the 1950s drum of marijuana being bad for you. Stab does the odd story about its medicinal qualities or the even odder story where a writer partakes and interviews Herb Fletcher but all very… odd.

But why? But what the hell?

The world is basically ending and if you want to toast the good times like Jeff Spicoli of old then we’re here to help and especially if you live in greater San Diego. Tomorrow (August 24th) head into PLPCC near the airport, buy one gram of Hot Nife and get a half gram free.

You read that right! Free weed! All you need to do is go inside, say you heard about this on BeachGrit and don’t like strange moralist tirades in your surf media and then boom. There you’ll be!

PLPCC is only the finest, friendliest marijuana dispensary in maybe the world and Hot Nife is a new cannabis oil brand that gets it. That understands that, sure, people consume weed in order to ease aches and pains and headaches etc. but they also consume to have fun and get high!

Just click the gorgeous colors in the margins and you’ll be delivered to where you want to be. Don’t forget to bring your medical marijuana card and your ID. In January it’ll be a free-ish for all but until then…

Bon appetit!

“Wavegarden will be fucking horrified!”

Derek Rielly

by Derek Rielly

Greg Webber's long-awaited wavepool only six weeks away from breaking dirt!

Earlier today, on the generally very good and mercifully sober website, swellnet, it was reported that Greg Webber’s first wavepool was six weeks away from breaking dirt at a secret Gold Coast location.

(Phew, long sentence.)

“The structural and mechanical enginnering is already under way,” said Greg, “while the civil work, the excavation of the lagoon, begins in six weeks.”

The long-awaited pool would be three hundred metres long by one hundred and fifty metre wide and, said Greg, an American licensee, Ocean Sports Development, “have just signed an exclusive agreement with Sports Facilities Advisory (SFA) with roll out imminent across the country.”

Read the rest of that story here, although you’ll quickly realise I’ve bitten most of the meat off the bone.

I was very hurt that I didn’t get the exclusive to the story as I’ve known Greg for a very long time and have been, mostly, kind in my reporting. Every few days for the last six months I would send a text message that read, “Any news?” or “How’s the pool?”, sometimes with decorative emoji.

The first I knew of this story was an email from Greg that read, “Guess you saw the swellnet post. I’ve owed him priority for over two years.”

Why?

“I made a promise after he did the patent story between kelly and I.”

Heartbreaking, yes, but also heartwarming as loyalty is such a rare commodity.

Now let’s examine the new pool, closely. The difference, says Greg, between his and Kelly and Wavegarden is theres is a soliton pool, his is kelvin. 

(More about that in a subsequent post, when Greg completes lunch.)

And Greg’s will be better, he says, because it has a superior wave rate (a pool has to be commercial), a trough (“You don’t travel the world looking for flat-faced waves,” says Webber) and the ability for the wave to be… customised.

“If you can’t make ridiculous distortions it’s going to get boring. You just can’t provide an A, B and C model. Customising is critical. If you can make a wave go from half-a-metre to two-and-a-half metres in five seconds, that’s a ridiculous distortion. It doesn’t happen in nature. And if you can actually create bulges and lumps and backdoors that you can see coming in towards you, but you haven’t ridden that wave before, that degree of random is going accentuate the whole experience. Before my pool’s done no one will realise how vital it is to throw some shit at people so that you’re never aware of what’s going to happen next.”

Wavegarden, says Webber, will “end up being redundant. They’d be horrified at what Kelly did and and even more fucking horrified when I build my one. (But) only one is going to make money. My one. There’s only one design and it revolves around using the Kelvin wake. It allows us to do 500 waves an hour as a base rate. We can have a ride rate of 5000 rides per hour. That’s fucked up. That’s proper money.”

And let’s talk irony, briefly. All the huffing and puffing over Wavegarden in Perth and Melbourne and Sydney and not one dirtied spade.

Wouldn’t it be terrific if Greg, who has promised a pool for years, opens his doors first.