Luca di Montezemolo

Yeah, they don't produce the most profit, but they are the most valuable team because they're Ferrari and everyone pays a little extra premium for Ferrari and everything.

Yep.

Then lastly, 4.5% of their revenue is financial services and some other random stuff, including selling engines to other Formula One teams.

Right.

So this is the money that the Cadillac team is paying to Ferrari to put an engine in their car.

Yep.

All right.

Multiples.

For anyone who is not an investor, this is... When you look at the current business...

How many years of the current business would you have to pay them to buy the whole company from them?

And there's a bunch of different ways to slice it.

We're going to look at the price-to-earnings ratio, or PE.

Ferrari trades at about 35 times their earnings.

And until the luxury slump, where LVMH and Hermes and all these other companies got hit too in the last couple of years, it was trading around 50x.

for their last few years.

Now, for reference, most automakers trade at 8 to 10x, and Hermes trades at 35 to 60x.

Again, big swing the last few years, and LVMH sort of around 25x.

So essentially, the market agrees with management that this is a luxury company, not a car company.

Yes.

The implication here with a very high price to earnings multiple is that investors believe that the profit streams are a lot more durable and certain compared to traditional automakers.