The CEO resigned and “restructuring” has been mentioned.
Let’s face facts. LiveWire—Harley-Davidson’s electric motorcycle offshoot—has been in trouble basically since its inception. Originally hampered by a motorcycle that cost way too damn much for the performance it offered, it’s gone from failure to failure in terms of its offerings, and has only ever done one thing: burn cash.
Year after year, it’s just failed to do anything other than be cash-flow negative, as its executives have pushed headfirst into the realm of on-road all-electric motorcycles, a class of motorcycles that just fails in every regard. But most importantly, at being something the public actually wants. And that shows in the brand’s sales figures, which have never really touched past 1,000 bikes sold in an entire year.
This year, however, it started making what I would call The Right Moves. First, and what I feel like is its most consequential decision it’s ever made, it scooped up Dust Moto, a small EV dirt bike startup, to get its foot in the hottest motorcycling market right now. This, if it can get the project to fruition, has the real possibility of finally getting a profitable EV motorcycle out the door, and the type of volume sales it’s always sought. And second, it launched the Honcho, a pint-sized, all-electric pit/city bike à la the Honda Grom, which is the second hottest market for the youth, as well as city dwellers all around the world. It’s a scooter, but with better looks, and outside the United States, scooters reign supreme.
These two motorcycles could seriously be LiveWire’s saviors,
These two motorcycles could seriously be LiveWire’s saviors, as they’re EV offerings the market actually wants, not some overweight, overpriced, needlessly complex, compromised on-road motorcycles, which is the rest of LiveWire’s current offerings.
Yet, with the surprise resignation of LiveWire’s CEO Karim Donnez last week, and the appointment of Roy Gallagher of the Ankura Consulting Group as the brand’s chief restructuring officer, were those great decisions too little too late? Maybe.
Man, are we going to get another Alta?
The biggest problem LiveWire has right now is that its debt, which is substantial, is going to mature next year. In the brand’s Q3 financial statements, it states, “Management has determined that conditions and events raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the Company’s September 30, 2026 consolidated financial statements are issued. The Company’s recurring operating losses, negative cash flows from operations, limited liquidity resources, and anticipated future funding requirements contributed to this determination.”
Yeah, it’s got mountains of debt, income remains
So yeah, it’s got mountains of debt, income remains elusive, and the operating losses are beginning to be too much to handle. So much so, they’re not even sure the company will survive the next fiscal year. As for Donnez’s resignation, it’s effective immediately, which is interesting in itself, as LiveWire is set to supposedly make some big splashes at EICMA next week, as well as launch the production version of the Dust Hightail, the EV dirt bike that very well could save the company. Yet, the introduction of Gallagher as the brand’s newly appointed CRO, could be why Donnez is out so quickly. But even his appointment is odd, especially when you consider that LiveWire agreed to pay Ankura $140,000 a month for Gallagher’s services.
There’s bleeding cash, and then there’s bleeding cash while paying someone to tell you that you’re bleeding cash. Feels like the old “Here’s your sign” joke.
What was said is that Gallagher will also be looking to “review, evaluate and negotiate, and, if deemed advisable by the Special Restructuring Committee, to recommend to the Board the approval or rejection of any debt or equity or other financing, sale, restructuring, recapitalization, strategic transaction or other similar opportunity or transaction for the Company.”
Gallagher is also looking into whether there have
Moreover, Gallagher is also looking into whether there have been or continue to be any conflicts of interest on LiveWire’s board, with LiveWire stating Gallagher will also “determine whether a Strategic Transaction involves a matter in which any director may have an interest that conflicts with, or is different from or in addition to, the interests of the Company and its stockholders generally.” Whether that’s common or not, it does feel interesting that LiveWire stated it in its Q3 financials specifically.
What do you think?
So what happens next? That’s unclear. Restructuring doesn’t mean the death of the brand. It could, and likely should, be reabsorbed into Harley-Davidson, its on-road motorcycles killed, and the brand should focus on which EV motorcycles are doing well, i.e., dirt bikes and scooters. And if it still wants a halo product, which I don’t think it should, update the LiveWire One with more modern technology. Again, I wouldn’t, but LiveWire ain’t paying me $140,000 a month for my services.
My one hope is that Dust doesn’t go the way of Alta, cause that’d be two for two, and not in a good way.
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