Anyone have and idea as to what is going on with Cazoo?

[MattsCar]

Well...other than the share price dropping from close to 30k USD to about 5 USD over the past few years after a reverse stock split. Ouch.



They are now changing the way they do things and sacking lots of people, selling their inventory and abandoning their dealerships in order to focus on a new business model to take on Auto Trader.

I have tried to research this, but can't find an answer and excuse me if I sound dumb as I am not an expert, but what are the risks, if I were to invest now? Will the new business continue to operate under the same entity and remain listed on the stock market.

Edited by MattsCar on Thursday 21st March 22:06

[AllyM]

The risk is that it goes to zero.

[goldieandblackie]

Flush the toilet, it's a floater.

[interstellar]

They will be delisting apparrantly I read somewhere.

Edited by interstellar on Thursday 21st March 23:24

[macron]

AllyM said:

The risk is that it goes to zero.

This

What exactly do you think you're investing in?

An online marketplace that no one visited to buy cars now thinks it can rival the biggest online marketplace for cars.

How? What track record do they have in this? Who will pay them over AT? What's their marketing budget when their market cap is £20m? Yeah they're freeing up cash by flogging stock, but they're still burning it, they have people to pay, and pay off as they make them redundant, and overheads every day on sites they haven't shifted.

"Oh but look the share price rose 48% yesterday". And it could just as easily drop by that tomorrow. The founders have their yachts. It's a non-working lavatory handle.

[MattsCar]

interstellar said:

The will be delisting apparrantly I read somewhere.

That is all i needed.

Thanks.

[MattsCar]

macron said:

AllyM said:

The risk is that it goes to zero.

This

What exactly do you think you're investing in?

An online marketplace that no one visited to buy cars now thinks it can rival the biggest online marketplace for cars.

How? What track record do they have in this? Who will pay them over AT? What's their marketing budget when their market cap is £20m? Yeah they're freeing up cash by flogging stock, but they're still burning it, they have people to pay, and pay off as they make them redundant, and overheads every day on sites they haven't shifted.

"Oh but look the share price rose 48% yesterday". And it could just as easily drop by that tomorrow. The founders have their yachts. It's a non-working lavatory handle.

Noted. That was my thinking.

Edited by MattsCar on Thursday 21st March 23:20

Edited by MattsCar on Friday 22 March 14:58

[Timberwolf]

They launched in those heady days of "infinite scale!" startups and people got too blinded with the fancy hockey-stick growth curves to consider that the used car stock they needed for the business to operate had to come from somewhere, and that somewhere was almost completely sewn up by BCA or BCA-owned businesses (or the local equivalent). And they tried to play the SPAC game which is rarely a good sign for long-term returns.

Now reality has happened and the market has realised all the promises in the world of owning a central position in the used car marketplace doesn't matter a jot if you're using VC money to buy cars at £20k to sell them on to a punter at £19.5k. And at some point even the most starry-eyed of investors realise this where you get to, "we're going to pivot to build some software to do a thing on a shoestring budget and hope we can break even on the maintenance costs" and that is at best a route to a small, also-ran company on the fringes of a market where others have been doing that for years.

Edited by Timberwolf on Thursday 21st March 23:37

[MattsCar]

Thanks, for the comments.

Just wanted to know if they were delisting or not, or if they were carrying on without delisting but restructuring.

[NowWatchThisDrive]

As tends to happens in these situations, the stock is trading like a call option on the company's ability to survive, which is effectively all it is at this point.

[Lord_Howit_Hertz]

Timberwolf said:

They launched in those heady days of "infinite scale!" startups and people got too blinded with the fancy hockey-stick growth curves to consider that the used car stock they needed for the business to operate had to come from somewhere, and that somewhere was almost completely sewn up by BCA or BCA-owned businesses (or the local equivalent). And they tried to play the SPAC game which is rarely a good sign for long-term returns.

Now reality has happened and the market has realised all the promises in the world of owning a central position in the used car marketplace doesn't matter a jot if you're using VC money to buy cars at £20k to sell them on to a punter at £19.5k. And at some point even the most starry-eyed of investors realise this where you get to, "we're going to pivot to build some software to do a thing on a shoestring budget and hope we can break even on the maintenance costs" and that is at best a route to a small, also-ran company on the fringes of a market where others have been doing that for years.

Edited by Timberwolf on Thursday 21st March 23:37

Thats very well put together!

Worked in the industry for a very long time, even when they came along and smashed a marketing budget with very little investment in Tech it was always going to be a case of 'when' not 'if' they imploded by there own market downfall. They where never in the game and wont be.