Day: 22 August 2025

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News agent makes the news – WH Smith’s fresh start derails in a fog of accounting mistakes

W H Smith error

WH Smith’s attempt to reinvent itself as a sleek, travel-focused retailer has hit turbulence, with a £30 million profit overstatement in its North American division sending shares into a 42% nosedive.

The error, stemming from premature recognition of supplier income, has triggered a full audit review and left investors ‘sobbing into their cornflakes’, as one analyst reportedly put it. Not nice!

The timing couldn’t be worse. Having sold off its UK High Street arm earlier this year, WH Smith was banking on its overseas operations to deliver growth.

Instead, the company now expects just £25 million in North American trading profit—less than half its original forecast.

The reputational damage is compounded by the fact that supplier income, often tied to promotional deals, is notoriously tricky to account for.

WH Smith’s misstep suggests not just a lapse in judgement, but a systemic failure in financial controls.

Table of events

MetricDetails
📊 Profit Overstatement£30 million
🧾 Cause of ErrorPremature recognition of supplier income
🇺🇸 Affected DivisionNorth America
📉 Share Price Impact42% drop
📉 Revised Profit Forecast£25 million (down from £54 million)
🕵️‍♂️ Audit ResponseFull review initiated by Deloitte
🏪 Strategic ContextWH Smith sold UK High Street arm earlier in 2025
📦 Supplier Income RiskOften tied to promotional deals; hard to track

This isn’t merely a spreadsheet error—it’s a strategic setback. The retailer’s pivot to travel hubs was meant to offer high-margin stability, buoyed by a captive audience.

But the accounting blunder casts doubt on the robustness of its operational oversight, especially in a market as competitive as the U.S.

With Deloitte now combing through the books, W H Smith faces a long road to restore investor confidence.

For a brand that once prided itself on reliability, this episode is a reminder that even legacy names can falter when ambition outpaces accountability.

W H Smith share price (one-month chart) 21st August 2025

Let’s hope the next chapter isn’t written in red ink.

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U.S. zombie companies on the rise!

BIG tech creating Zombie companies

As BIG tech poaches top AI talent, these companies are stripped to the bone as the tech talent is being hollowed out!

In the race to dominate artificial intelligence, America’s tech giants are vacuuming up talent at an unprecedented pace.

But behind the headlines of billion-dollar acquisitions and flashy AI demos lies a quieter crisis. The creation of ‘zombie companies’ — startups left staggering and soulless after their brightest minds are poached by Big Tech.

These zombie firms aren’t dead, but they’re no longer truly alive either. They continue to operate, maintain websites, and pitch to investors, yet their core innovation engine has stalled. The problem isn’t just brain drain — it’s brain decapitation.

When a startup loses its founding engineers, lead researchers, or visionary product designers to the likes of Google, Meta, or Microsoft, what remains is often a shell with no clear path forward.

The allure is understandable. Big Tech offers salaries that dwarf startup equity, access to massive compute resources, and the prestige of working on frontier models. But the downstream effect is corrosive.

Startups, once the lifeblood of AI experimentation, are now struggling to retain talent long enough to reach product maturity. Some pivot to consultancy, others limp along with outsourced development, and many quietly fold — their IP absorbed, their vision diluted.

This phenomenon is particularly acute in the U.S., where venture capital encourages rapid scaling but rarely protects against talent attrition. The result is a growing class of companies that exist more for optics than output — kept alive by inertia, legacy funding, or the hope of acquisition.

They clutter the innovation landscape, making it harder for truly disruptive ideas to gain traction.

Ironically, Big Tech’s hunger for talent may be undermining the very ecosystem it depends on. By stripping startups of their creative lifeblood, it risks turning the AI sector into a monoculture. This culture is then dominated by a few players, with fewer voices and less diversity of thought.

The solution isn’t simple. It may require new funding models, stronger incentives for retention, or even regulatory scrutiny of talent acquisition practices.

But one thing is clear: if the U.S. wants to remain the global leader in AI, it must find a way to nurture its startups — not just harvest them.

Otherwise, the future of innovation may be haunted by the walking dead.