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Old 08-02-2013, 01:24 PM   #3691
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Somebody can double check the stats, but if I recall... Nicky would typically qualify better than Rossi on the Duc. So, yeah, the bike can be ridden fast for a couple laps..but not a race distance..not with current tires.
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Old 08-02-2013, 01:27 PM   #3692
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Honey Badger doesn't give a shit. He'll just take his millions of lira and sexy girlfriend and ride off into the Eyetalian sunset....








Somone with some photoshop skills please add Ducati colors and #35 to that one..
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Old 08-02-2013, 01:37 PM   #3693
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Regarding Audi purchasing Ducati for pure business reasons, that may very well be true, but it must've had more to do with building a suite of exclusive brands than money. They paid $1.15 billion for a company that produces about $600 million in revenue. And if you look back at Ducati's revenue history, 2012 might have been a spike. In any event, it's going to be hard for Audi to get a direct return on their investment paying 2x revenue. I think they want to race. Maybe even race BMW in MotoGP . They'll have a pretty good head start.
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Old 08-02-2013, 01:38 PM   #3694
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Then why pay Crutchlow millions?
Marketing.
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Old 08-02-2013, 02:02 PM   #3695
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Originally Posted by brents347 View Post
You start by saying Cal knows nothing, and then proceed to speculate or opine for two paragraphs. Is there any chance that Cal know more about the situation than you do?

I tend to think Cal doesn't make this move without some promise or glimpse of bike progress in the future. Money or not, I believe he also has to be convinced the bike will get better.
First, I want nothing more than Cal to succeed. That said, how many years has Ducati been floundering in MotoGp? Nobody knows if/when the bike will be fixed. Cal can hope, but track record don't look so good.

They gave Rossi promises, too. Yeah, yeah, it's a different company and all, but it is all wait and see.



PS how are Ducati sales in the UK? Bet they go up now that Cal is on board.
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Old 08-02-2013, 02:17 PM   #3696
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Originally Posted by Pantah View Post
Regarding Audi purchasing Ducati for pure business reasons, that may very well be true, but it must've had more to do with building a suite of exclusive brands than money. They paid $1.15 billion for a company that produces about $600 million in revenue. And if you look back at Ducati's revenue history, 2012 might have been a spike. In any event, it's going to be hard for Audi to get a direct return on their investment paying 2x revenue. I think they want to race. Maybe even race BMW in MotoGP . They'll have a pretty good head start.
If your numbers are correct, that is 100% ROI in just under two years. Everything after that is gravy. And gravy is good.

If you ever get the chance and are in the area...check out one of the NYC Ducati open houses. You get to see multiple customers of theirs pull up with their highpriced bikes, decked out in Ducati leathers, that probably cost more than I paid for my last motorcycle. That revenue stream is worth the purchase alone....the only other company to have as big(bigger) non motorcycle stream is HD...and they got a whole lotta pirates floating that boat.

BTW..I am sure you are right too, about their desire to race...and potentially beat their biggest car rival, BMW.
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Old 08-02-2013, 02:34 PM   #3697
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Originally Posted by DougZ73 View Post
If your numbers are correct, that is 100% ROI in just under two years. Everything after that is gravy. And gravy is good.

If you ever get the chance and are in the area...check out one of the NYC Ducati open houses. You get to see multiple customers of theirs pull up with their highpriced bikes, decked out in Ducati leathers, that probably cost more than I paid for my last motorcycle. That revenue stream is worth the purchase alone....the only other company to have as big(bigger) non motorcycle stream is HD...and they got a whole lotta pirates floating that boat.

BTW..I am sure you are right too, about their desire to race...and potentially beat their biggest car rival, BMW.
Revenue doesn't equal profit. If it took only two years to gain back 1.2 billion, that was a golden business deal!

I heard that it was an emotional decision from the man Piech himself, who is a Ducati fanatic.
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Old 08-02-2013, 02:41 PM   #3698
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Originally Posted by DougZ73 View Post
If your numbers are correct, that is 100% ROI in just under two years. Everything after that is gravy. And gravy is good.
I'm no financial genius (be riding a Ducati iffin I was) but I think you're confusing revenue and profit here. The money made from that $600 million is the profit that would be used to get a return on investment. Gonna take more like 2 lifetimes than 2 years.

Honda being the exception that proves the rule, car companies and bike companies mix like oil and water. Those who were expecting a bunch of Prussian car guys to solve Ducati's issues are still waiting, further behind Yamaha and Honda than they ever were.
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Old 08-02-2013, 02:53 PM   #3699
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Originally Posted by brents347 View Post
You start by saying Cal knows nothing, and then proceed to speculate or opine for two paragraphs. Is there any chance that Cal know more about the situation than you do?

I tend to think Cal doesn't make this move without some promise or glimpse of bike progress in the future. Money or not, I believe he also has to be convinced the bike will get better.
That's what they all have thought(and us)


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Old 08-02-2013, 03:00 PM   #3700
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No, they're confusing sales with net revenue (aka profit). Buying a company for 2X sales is usually a good deal-- even a company in a cyclical industry.

Somewhat different business of course-- but look at the sales multiples internet companies pay. The reason I say "somewhat" is that, as someone mentioned previously, Ducati is not necessarily just in the transportation business; they ( like other VW companies like Bentley, Bugatti, Lamborghini, and Porsche) are in the lifestyle business. I can hear the Lambo salesman now-- "you know, sir, a Panigale would look great parked next to the Gallardo in your collection-- sort of an homage to current Italian design (and left unsaid out loud--"that really shows off your high level of taste"). And it's only the same cost as your first Lambo service" .

VW is many things-- poor businessmen is not one of them. Just ask the Porsches (family).

wpbarlow screwed with this post 08-02-2013 at 04:23 PM
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Old 08-02-2013, 04:11 PM   #3701
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Originally Posted by Dunewar View Post
Revenue doesn't equal profit. If it took only two years to gain back 1.2 billion, that was a golden business deal!

I heard that it was an emotional decision from the man Piech himself, who is a Ducati fanatic.
I'd think Piech's greater motivation is satisfying his ego, and not being one-upped by BMW.
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Old 08-02-2013, 05:15 PM   #3702
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No, they're confusing sales with net revenue (aka profit). Buying a company for 2X sales is usually a good deal-- even a company in a cyclical industry.



VW is many things-- poor businessmen is not one of them. Just ask the Porsches (family).
Dear Mr. Barlow. Not to discredit, but 2x revenue is pretty steep...

If the acquired company nets a 10% margin on revenue, and the acquiring company pays 2X revenue, that means the new owners will make 5% on their investment each year. That suggests it would take 20 years just to get their investment back!

20 years is a long time for a company that has been basically break even for its entire history.

But hey, maybe Audi will set them right! Maybe they see a future. Racing motoGP will be part of it, and they want to win. Maybe at all costs. Afterall, it's a small fraction of the cost of F1.
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Old 08-02-2013, 06:10 PM   #3703
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...If the acquired company nets a 10% margin on revenue, and the acquiring company pays 2X revenue, that means the new owners will make 5% on their investment each year. That suggests it would take 20 years just to get their investment back!
First off, we don't know what Ducati's real margins are. Their financials look bad, but I've worked for a large Italian company and know first hand that what's reported "ain't necessarily so" Regardless, I suspect that VW/Audi did some level of due diligence so they wouldn't wind up a laughing stock financially.

VW Group generates free cash of about $8B a year, so $1.2B is not such a big deal.

Second, it's not that it takes 20 years to get their money back-- Ducati is and always will be worth something. So look at this purchase as an alternative to putting money in some kind of investment. There are not many reasonably safe investments that are paying 5%-- certainly not anything associated with sovereign debt or bank accounts. So that leaves few areas where companies can invest with decent returns. And with Ducati, VW/Audi gets a known tangible asset over which they can exert influence to increase the ROI. It's either invest or return money to shareholders: and management only does the latter as a last resort .


Otoh, maybe it's just a trophy buy .
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Old 08-02-2013, 07:06 PM   #3704
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LOL..did not mean to start a a whole financial debate.....when is the next race?

I am not a business genius either, more of a science major, business minor.

I understand the difference between revenue and profit. I also understand that companies are valued based on their revenue, and not their profit. Although profit, is important, revenue is more important. A company can survive without profit, but will not survive without revenue. If your revenue stream is worth X, and all your costs equal X, you still survive. If your costs exceed your revenue, you do not. Profit is gravy for growth. But a company does not have to grow to survive.

Walt..I was the one that mentioned the non motorcycle revenue stream. And yes, like HD, they are selling a lifestyle. That is what led to my little anecdote about my past track days.
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Old 08-02-2013, 07:42 PM   #3705
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I think I need to invent the on-board tire heating mechanism that uses an infrared tire monitor and a exhaust heat ducting system to optimize the tire edge heat for the next corner......
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