Neil Mehta

How many companies can you name that went from $70 billion market cap to one and weren't like a fraud? Zero. After you and I had this conversation, we actually looked it up. The answer is none. is none. As it started to go from $70 billion or $300 plus a share down to $50 a share, actually, and $100 a share, we started to become very interested in it. And there was two questions.

How many companies can you name that went from $70 billion market cap to one and weren't like a fraud? Zero. After you and I had this conversation, we actually looked it up. The answer is none. is none. As it started to go from $70 billion or $300 plus a share down to $50 a share, actually, and $100 a share, we started to become very interested in it. And there was two questions.

The first question was the market was getting killed. I think it was one of the largest peak to trough drops in used cars in the last 30, 40 years. Was this a one-time thing? Was this going to reverse? The second is his unit economics were terrible. I don't think he'd mind me saying that. He was losing $3,000 a unit on an EBITDA basis.

The first question was the market was getting killed. I think it was one of the largest peak to trough drops in used cars in the last 30, 40 years. Was this a one-time thing? Was this going to reverse? The second is his unit economics were terrible. I don't think he'd mind me saying that. He was losing $3,000 a unit on an EBITDA basis.

If that wasn't enough, he had about $2,000 of interest payments per unit. So he had $5,000 per unit of costs. So the question was not if, but when is this company going to go bankrupt? And so the stock went from 100 to 50. We started to buy around then. Of course, we started to buy all the way down to about five.

If that wasn't enough, he had about $2,000 of interest payments per unit. So he had $5,000 per unit of costs. So the question was not if, but when is this company going to go bankrupt? And so the stock went from 100 to 50. We started to buy around then. Of course, we started to buy all the way down to about five.

My partner, Ben, it doesn't feel great when you start to buy at 50 and then at 30 and then at 20. And then the 20 goes down to five. Ben has a great line, which is, what's the difference between being down 95% and 97.5%? Just halfs. And so that was a tough moment at Greed Oaks. We invested a substantial amount, became one of our largest investments in our fund. And we had a view.

My partner, Ben, it doesn't feel great when you start to buy at 50 and then at 30 and then at 20. And then the 20 goes down to five. Ben has a great line, which is, what's the difference between being down 95% and 97.5%? Just halfs. And so that was a tough moment at Greed Oaks. We invested a substantial amount, became one of our largest investments in our fund. And we had a view.

Our view was that Ernie had a decent amount of runway. There was things he could do operationally to fix the business fairly quickly. And we did what any investor might do at the time. We went line item by line item. We said, here's where he needs to cut. Here's what he needs to change. And much to our chagrin at the time, Ernie didn't do any of those things.

Our view was that Ernie had a decent amount of runway. There was things he could do operationally to fix the business fairly quickly. And we did what any investor might do at the time. We went line item by line item. We said, here's where he needs to cut. Here's what he needs to change. And much to our chagrin at the time, Ernie didn't do any of those things.

And it wasn't until later, I'll come to a couple of stories. It wasn't until later that I realized there's certain CEOs that might react immediately in order to placate the market. What he was doing was doing a bunch of AB tests internally to figure out what were the right things to cut and make sure that he could manage the company through it and grow on the other side.

And it wasn't until later, I'll come to a couple of stories. It wasn't until later that I realized there's certain CEOs that might react immediately in order to placate the market. What he was doing was doing a bunch of AB tests internally to figure out what were the right things to cut and make sure that he could manage the company through it and grow on the other side.

It takes a lot of intestinal fortitude. Yeah. There's a bunch of really good stories about Carbon. As the stock started to drop and we started to buy more, not everybody was thrilled with us, but we thought we fundamentally understood that he would be able to reverse the unit economics on a per unit basis.

It takes a lot of intestinal fortitude. Yeah. There's a bunch of really good stories about Carbon. As the stock started to drop and we started to buy more, not everybody was thrilled with us, but we thought we fundamentally understood that he would be able to reverse the unit economics on a per unit basis.

There are things he could do to not just stave off bankruptcy, but be an ongoing concern with a strong capital structure. And then the second part of that is the debt side was really reflexive. If you're right on the first part, you're kind of right on the second part. So it's a two-part investment for us. One was the company won't go bankrupt. Second, is this a business that could go from

There are things he could do to not just stave off bankruptcy, but be an ongoing concern with a strong capital structure. And then the second part of that is the debt side was really reflexive. If you're right on the first part, you're kind of right on the second part. So it's a two-part investment for us. One was the company won't go bankrupt. Second, is this a business that could go from

400, 500,000 units to 2 million, 3 million, 5 million units over time. Used cars are about 40 million units a year or something like that. And I remember this was a big debate for us, but it really also comes back to founders. I went out to Phoenix, sat down with them for dinner. I got on the plane. I was reading the papers and four of the articles were about earning and how terrible earning was.

400, 500,000 units to 2 million, 3 million, 5 million units over time. Used cars are about 40 million units a year or something like that. And I remember this was a big debate for us, but it really also comes back to founders. I went out to Phoenix, sat down with them for dinner. I got on the plane. I was reading the papers and four of the articles were about earning and how terrible earning was.

It was like, he's a crook. He's awful. The company's terrible. They can't pay their bills. It's about to go bankrupt. Employees are leaving in droves. It was like left for the dead. I remember. You remember this, and I remember getting out there, and I remember sitting down with him. We talked about the business, we talked about all the things, but I remember the first thing I did is I said,

It was like, he's a crook. He's awful. The company's terrible. They can't pay their bills. It's about to go bankrupt. Employees are leaving in droves. It was like left for the dead. I remember. You remember this, and I remember getting out there, and I remember sitting down with him. We talked about the business, we talked about all the things, but I remember the first thing I did is I said,