6:28 am, September 24, 2022
A Norwegian billionaire has bet big on troubled online used car retailer Cazoo with a 60m share purchase.
Viking Global Investors hedge fund manager Andreas Halvorsen has taken the 7.3 per cent stake in the used car dealer as the share price plummets.
Cazoo’s stock fell nearly 20 per cent yesterday alone, down to just 48 cents. The share price has plummeted 92 per cent in the last year.
Halvorsen’s fund manages $25bn in assets and is based in Connecticut.
Halvorsen built his position in Cazoo in the third quarter of the year as of the end of June, Viking Global Investors held no shares in the used car dealer.
The fund manager has a net worth of $6.6bn, according to Forbes, after he started out on his own in 1999. He previously worked at Tiger Management.
The Cazoo stake was revealed via a ‘13D form’, reported the Investor Place website, which it says means he ‘seeks to take an activist stance in the company’.
Experts at the investment website said: ‘With margins, gross profit, and adjusted earnings before interest, taxes, deductions and amortisations (EBITDA) falling dramatically, Cazoo is in an extremely difficult spot.
‘Still, the help of Halvorsen and Viking Global is ultimately a positive signal for the struggling car seller.’
Cazoo recently revealed it would be winding down its European operations which it spent multi-millions of pounds building.
Its subscription car services have already been canned and it is in the process of pulling out of Italy, France, Spain and Germany – all countries it has blown millions on building representation in.
Cazoo also said it would be slashing 750 jobs in the UK and elsewhere as it looks to cut more costs.
In August the firm revealed losses more than doubled for the first half of 2022 to £243m. That was a 141 per cent increase on the £102m loss it made in the same period in 2021.
Its gross profit per unit was also down for the period to £226 – it was £315 in the first half of 2021 – while gross margin plummeted from 4.6 per cent to just 0.5 per cent.
At the time, boss Alex Chesterman said he was proud of the figures – which did also reveal a rise in the number of cars sold – but hinted at further cuts.
‘I am very proud of what we have accomplished so far in 2022 as we continue to transform the car-buying and selling experience for consumers,’ he said.
‘We achieved record revenues and retail unit sales in Q2 and grew our market share significantly, despite the tough macroeconomic backdrop, as the consumer shift towards online car buying continues to accelerate.’
Looking ahead, he added: ‘Whilst our growth remains very robust, we are laser-focused on maintaining our strong balance sheet, preserving cash and materially reducing the need for further funding as we drive towards profitability.’
