
Cirque du Soleil files for bankruptcy and cuts 3,500 jobs - doppp
https://edition.cnn.com/2020/06/29/business/cirque-du-soleil-bankruptcy/index.html
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haram_masala
This is truly sad. Cirque is one of those organizations that creates magic.
Every single thing they do (on stage) has clearly been obsessed over, refined
to perfection, and rehearsed beyond any possible doubt. Part of the joy of
their shows is beholding a group of people who care that much about their
work.

On the other hand... later on in this article, it points out that Cirque du
Soleil is $1 billion in debt. That probably didn't happen in the past three
months. Perhaps Cirque is yet another swimmer who's being exposed when the
tide goes out, as Hertz was.

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kalenx
Their debt comes from their acquisition. I'm not sure I understand how this is
even possible, but it seems that hedge funds are able to buy entities (like
Cirque du Soleil) and transfer the cost of acquisition as a debt for the
acquiree -- and, of course, not be responsible for this debt.

~~~
xtracto
Same thing that happened to Toys R Us if I recall correctly.

So sad.

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smabie
I mean KKR and Bain took over Toys R Us in 2005 and it filed for bankruptcy in
late 2017. At the time of the LBO in 2005, Toys R Us was already hurting and
not in the best place. Though we can't know the path not taken, it's probable
that Toys R Us would have shut down earlier, the LBO might have been its best
chance of success.

Based on the articles that I've read about the LBO, I think there is an
argument to made that Toys R Us was mismanaged after the takeover: a
gargantuan sum was spent every year to service the debt that was taken on
after the LBO. People point out that because of this, Toys R Us was unable to
make the capital investments to compete with Amazon and big-box stores.

But it's not clear to me that TRU could even begin to compete, even if they
had the money for capital investment. Most of TRU's business is holiday gifts,
which is particularly sensitive to disruption by online retailers. No one is
stopping into TRU at the last minute for same household staple, everytime
someone needs a toy you know in advance (birthdays, holidays, etc). Because of
this, how could they ever have competed with Amazon?

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dehrmann
The Bloomberg story is a lot better. It talks about some of the upcoming
options, and it says Cirque will likely survive in a smaller form, so I doubt
this is Chapter 7.

[https://www.bloomberg.com/news/articles/2020-06-29/cirque-
du...](https://www.bloomberg.com/news/articles/2020-06-29/cirque-du-soleil-
files-for-bankruptcy-following-shutdowns)

~~~
ipnon
Bloomberg is consistently the best source of business and finance journalism,
even over the Wall Street Journal.

~~~
smabie
Bloomberg is in the business of supplying news to people who actually really
care about the details (traders, investors, etc), while WSJ is not. It's
amazing how great Bloomberg is and how far they've expanded in recent years:
tv, podcasts, longform, breaking news, etc. Like Google, this is all possible
because of their obscenely profitable core product (the Terminal), though
unlike Google, Bloomberg actually is in it for the long-haul.

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e15ctr0n
Cirque du Soleil served as a case study for innovation[1][2] in the business
book _Blue Ocean Strategy_ (2004)[3].

[1] [https://www.blueoceanstrategy.com/bos-moves/cirque-du-
soleil...](https://www.blueoceanstrategy.com/bos-moves/cirque-du-soleil/)

[2] [https://www.blueoceanstrategy.com/teaching-
materials/cirque-...](https://www.blueoceanstrategy.com/teaching-
materials/cirque-du-soleil/)

[3]
[https://en.wikipedia.org/wiki/Blue_Ocean_Strategy](https://en.wikipedia.org/wiki/Blue_Ocean_Strategy)

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joubert
Sad. Love the Cirque aesthetic.

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LaundroMat
There's also investigations ongoing into some of the people behind Cirque du
Soleil, see e.g. [https://circustalk.com/news/franco-dragone-prosecuted-for-
fr...](https://circustalk.com/news/franco-dragone-prosecuted-for-fraud-and-
money-laundering)

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tapatio
RIP

