A Christmas challenge – how to spend your Euromillions win!

It’s been an interesting year – to put it mildly, and most of us will be looking forward to a few days away from business life.  I’ll be one of them , so my next blog will be around January 9th.  In the meantime, rather than worry too much about the real world, and all the challenges that brings, I invite you to indulge in some festive fantasy…  The Euromillions prize fund is capped at €230 million, and it quite often gets up that sort of level due to the infinitesimally low odds of winning – you are more likely to be struck by lightning twice than win the Euromillions apparently.  However, it’s Christmas so we’re allowed to let our imaginations roam, and I’m pleased to tell you that you’ve scooped the jackpot!!

Now the hard work begins – how to spend it?  If you were sensible, you’d buy some property, treat yourself to a nice car and a great holiday, give some away to family and charities, perhaps put the rest aside and consider carefully how and when to spend it.  But you work in the car industry, so it’s quite likely that you love the industry and that you’re also a car enthusiast, so sense might be pushed aside by passion.  How will you spend that windfall?   I’ve come up with some ideas for you, trying to find the bargains that might be around at €230 million or so.

Fancy owning your own car company?  How about trying to beat Elon Musk at his own game by buying Faraday Future.  They claim that they will be starting production in March – though they admit that they need more capital to achieve that – and the car looks smart.  Market capitalisation today is a very reasonable $159 million, so you’ll have some change left over to participate in the next fund-raising round.  If you’ve been waiting a while for delivery of your new EV, this is one way to get to the front of the queue.

Or maybe, rather than own a car company, you’d like to be a bit more focused and just own a car.  A Euromillions win allows you to be quite ambitious.  You could go for ‘his and hers’ Ferrari 250 GTOs, and have some change left over for a selection of daily drivers, but if you want to stand out from the crowd, the car you need is the Mercedes-Benz 300 SLR Gullwing Uhlenhaut which sold at auction for US$142.5 million a few months ago.  You’ll probably never dare to drive it, but it is truly one of a kind.

A car like that really should be driven on a track, not round Mayfair in London or parked in front of the Casino at Monte Carlo.  Not a problem.  Perhaps Roger Penske could oblige and sell you the Indianapolis Motor Speedway – the “Brickyard” which apparently cost him $250 million when he bought it two years ago.  As the owner, you could presumably insist that you would be the one who started the Indianapolis 500 with that famous order – “Gentlemen, start your engines!” – a tradition that apparently only dates back to the early 1950s, although the race itself was first run in 1911.

Maybe you favour disruption rather than tradition, in which case you really need to be looking at an online used car business.  The last few weeks have been particularly tough for Carvana and Cazoo, with rumours of impending bankruptcy pushing the market capitalisation of Carvana down to under $950 million – still out of reach with just a Euromillions jackpot in the bank.  However, that is not a problem, as Cazoo has followed Carvana down a similar slippery slope, and the share price fell off a cliff at the end of last week, leaving it with a market cap of under $97 million.  Surely there is more news to follow this week, but the promise at the time of the IPO less than two years ago was “Search. Drive. Smile” – investors at that time don’t have much to smile about now…

Sticking to retail, we all expected that the lawyers would be at work now tying up the Hedin acquisition of Pendragon, this creating the second largest dealer group in Europe.  However, Hedin withdrew – at least for now – and the share price fell to under 18 pence from a bid price of 29 pence, pushing the market capitalisation down to an affordable (in our fantasy land) £250 million.  That’s a lot of dealer group for your money, and almost covered by the value of the property on the balance sheet – buy some buildings, get a couple businesses thrown in free!

If you’re worried about what agency might do the relevance and value of that £250 million property asset, it might be that an EV charging network could be more appealing.  There is a lot of consolidation going on at the moment across Europe, and as some big energy players come in, it is making life more difficult for earlier pioneers who lack their scale and marketing leverage.  An example is Pod Point in the UK, which despite a number of high profile alliances, has reported slower growth as BEV product shortages have affected demand.  Its share price has dropped by two thirds since the summer, leaving it with a value of just over £100 million today.

So when you check your numbers and you discover that you have a bit more than loose change in your pocket, what will you spend your money on?  Where do you see the best opportunity to double your money?  Is it going to be something traditional, or something new?  A turnaround opportunity or something a bit less risky?  Perhaps you have an even better idea for investing your windfall?  Please let me know by email or voting here, and I’ll share the results after the holiday period!

Thanks for your great feedback on my blogs over the last year – it’s really appreciated, and makes it worthwhile.  Enjoy the break, and best wishes for the New Year.  See you then!