Cliff Sosin

Which, if you haven't had a system before where you could accidentally buy more cars than you're selling because that's never come up, Now suddenly you have a problem where like you're buying cars, they're accumulating the system, you know, and you don't have your flows to your logistic system haven't been optimized for this. So the cars are piling up everywhere. You're sort of shuttling cars.

Which, if you haven't had a system before where you could accidentally buy more cars than you're selling because that's never come up, Now suddenly you have a problem where like you're buying cars, they're accumulating the system, you know, and you don't have your flows to your logistic system haven't been optimized for this. So the cars are piling up everywhere. You're sort of shuttling cars.

This is what the system looked like in January of 2022. It was total wreck. And they were trying to fix it. And, you know, it took them a few months to do it, like three, six months or whatever to fix this. But the important fact is that it obscured demand, which was falling off a cliff. Underlying demand was falling off a cliff.

This is what the system looked like in January of 2022. It was total wreck. And they were trying to fix it. And, you know, it took them a few months to do it, like three, six months or whatever to fix this. But the important fact is that it obscured demand, which was falling off a cliff. Underlying demand was falling off a cliff.

And it meant that they were still behaving in February like demand was as it had been in September, even though by that point, in retrospect, demand had materially declined. Yeah. they bought Odessa using tech. Odessa was, just describe what Odessa was. Sure. So Odessa is a traditional auction business.

And it meant that they were still behaving in February like demand was as it had been in September, even though by that point, in retrospect, demand had materially declined. Yeah. they bought Odessa using tech. Odessa was, just describe what Odessa was. Sure. So Odessa is a traditional auction business.

So I think a large lot, people bring car dealerships, fleets, they bring cars, and they hold in-person auctions. You drive them down a lane, people bid. The in-person auction business will have a long tail to it, but it's eventually a decaying business over time.

So I think a large lot, people bring car dealerships, fleets, they bring cars, and they hold in-person auctions. You drive them down a lane, people bid. The in-person auction business will have a long tail to it, but it's eventually a decaying business over time.

But what they got with Odessa is 54, I believe, very large, centrally located properties on which they can build IRCs and store facilities. One of the challenges in their business had been that it turns out they worked out that it is better for them to have large IRCs located relatively close to the customer, because fast delivery speeds are good. Access to labor pools is good.

But what they got with Odessa is 54, I believe, very large, centrally located properties on which they can build IRCs and store facilities. One of the challenges in their business had been that it turns out they worked out that it is better for them to have large IRCs located relatively close to the customer, because fast delivery speeds are good. Access to labor pools is good.

And those are more important than the benefits of being far away. But it turns out that getting 200 acres zoned for auto industrial within 10 miles of downtown Boston is difficult, to say the least. It turns out this is the sort of property that Odessa had. And so they basically bought it for the commercial real estate.

And those are more important than the benefits of being far away. But it turns out that getting 200 acres zoned for auto industrial within 10 miles of downtown Boston is difficult, to say the least. It turns out this is the sort of property that Odessa had. And so they basically bought it for the commercial real estate.

It came with the auction business, which has a lot of benefits to them as well. And makes all the sense in the world. In retrospect, it's been a huge home run. But they bought it with all that. They bought it in February of 22 after, if you read the proxy or whatever, they've been talking for years. It just happened the timing was bad.

It came with the auction business, which has a lot of benefits to them as well. And makes all the sense in the world. In retrospect, it's been a huge home run. But they bought it with all that. They bought it in February of 22 after, if you read the proxy or whatever, they've been talking for years. It just happened the timing was bad.

So what happens is you get to March and they sort of realize that they have a demand problem. And I haven't really addressed what was going on that caused the demand problem. So there were, as far as I, my best understanding is there were three things. Although at the time I pretty much only sort of knew about two of them.

So what happens is you get to March and they sort of realize that they have a demand problem. And I haven't really addressed what was going on that caused the demand problem. So there were, as far as I, my best understanding is there were three things. Although at the time I pretty much only sort of knew about two of them.

And it's worth pointing out that all of these things, they kind of got worse and worse and worse and worse and worse over time. So you thought you'd identified it. And then like six months later, it was like worse. So the first, there were chip shortages. during 2020 and 21, which caused manufacturing shortages and caused used car prices to rise.

And it's worth pointing out that all of these things, they kind of got worse and worse and worse and worse and worse over time. So you thought you'd identified it. And then like six months later, it was like worse. So the first, there were chip shortages. during 2020 and 21, which caused manufacturing shortages and caused used car prices to rise.

You think about the used car business as facilitating people swapping cars. But what happens oftentimes when people are swapping cars is they're upgrading. And so if prices are higher, the cost of upgrading is greater. And that tends to reduce people's propensity to swap cars. As a consequence of that, the used car industry, which is typically about 40 to 42 million cars a year,

You think about the used car business as facilitating people swapping cars. But what happens oftentimes when people are swapping cars is they're upgrading. And so if prices are higher, the cost of upgrading is greater. And that tends to reduce people's propensity to swap cars. As a consequence of that, the used car industry, which is typically about 40 to 42 million cars a year,