Deep Sail Capital Profile picture
Nov 7, 2019 10 tweets 3 min read Read on X
$CVNA is in some serious Trouble - Thread.
1) Unit sales growth slowed down significantly in Q3 which is usually a solid Q for auto sales. QoQ Sales were up only 5.5% or 23.8% annualised.
2) Gross Margins are 1/3 Financing driven, but it banks on third party securitization always being available at at favourable rates, but what if...
3) ...the delinquency rates are not going the right direction. GP from securitisation will come under pressure.
4) Margin improvements have broken trend. Maybe due to weakness in the overall auto market?
5) Share count is out of control. Diluted shares are up 8% QoQ and 43% YoY. That’s like nuts, even for a super fast growing tech business.
6) On a per share basis they actually only grow revenue 44%!

Q3 2019:
$1,094 / 49.7 = $22.2 / share
Q3 2018:
$534 / 34.6 = $15.4 / share
7) Management is bold, and likely wrong about getting to 2m cars sold per year. CarMax sells 800,000 for context. Without 2m or near that their operating leverage aspirations and long term model is unachievable.
8) Knowing all this do you blame them for cashing out? Kind of shitty they are diluting the shit out of investors but to each their own.
9) These earnings were truly catastrophically bad, the stock should be down 25-30%.

Happy hunting!

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Aug 29, 2023
$VFS - I love the insanity of this. $220B market cap Vietnamese EV maker.

Clearly a SPAC with limited float is gonna yield some interesting outcomes. But $VFS is like beyond insanity.

A Thread: 🧵
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“the company surviving the merger as a whole owned subsidiary of VinFast”.

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SPACs are dumb and should be illegal:

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Shares are currently worth $84.

So that’s a 21,000% return. Image
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Image from this great thread from @ProcedoCap (good follow) Image
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Top Picks for 2022: 5 Long / 5ish Shorts
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1) Buy an NFT for .1 ETH from one Ethereum wallet

2) Buy that same NFT for 9.9 ETH from another wallet. It now has a “value” or “sales history” on OpenSea of 9.9 ETH, but you paid yourself the 9.9 ETH.

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