SPACs

[Spekulatius]

The VW ID.3 seems to be outselling the Tesla 3 in Europe. It will be interesting how the ID.4 (a bigger crossover type vehicle) will do - the base version is supposed to come out in March 2021 in the US.

 

I think we will see quicker adoption than some people think as it looks to me like the tipping point finally has been reached in EV availability and adoption. Ten years from now, I wouldn’t  be too surprised, if the vast majority of new cars sold are EV’s. The UK is already considering a ban for ICE cars starting 2030.

 

If you own a gas station or refinery assets, you are setting on a rapidly melting iceberg, imo.

 

https://www.bloomberg.com/news/articles/2020-11-26/vw-s-id-3-quickly-climbs-to-top-of-europe-s-electric-car-market

[Gregmal]

 

It really depends on what your portfolio strategy is. If you are someone that would never utilise margin unless on SPACs, then yes.

 

 

This is the case for me, yes. i.e. I will only use margin if I can be sure that the price won't drop significantly causing a margin call.

 

Now the thing that should provide a floor to the price ($10), is the redemption promise.

 

Doing some due diligence, there is one thing that concerns me:

 

https://en.wikipedia.org/wiki/Special-purpose_acquisition_company

says:

"Recent SPACs incorporated provisions that prevent public shareholders, acting alone or in concert, from exercising redemption rights in excess of 20% shareholding"

 

Looking at one example recent IPO (Duddell Street Acquisition Corp):

https://www.sec.gov/Archives/edgar/data/1823466/000095010320021018/dp139545_424b4.htm

says:

"our ... articles of association provide that a public shareholder, together with ... any other person with whom such shareholder is acting as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 20% of the shares sold in this offering"

 

Isn't this a risk? Because let's say the company announces its merger, but the market doesn't like it and the share price fails to rise very much or at all, then could the company try to claim that you are in a "group", refuse the redemption, resulting in the price dropping well below $10?

 

I dont really think that's something most need to be concerned with. I've never seen one go below $10 on a deal announcement, including ones only a couple months away from expiration. The subject you are referring to is largely meant to prevent a more recent phenomenon where you get people kind of colluding together at the last minute trying to get better terms, more warrants, etc. Even in these instances, by the time it gets to this type of situation, you've already had plenty of time to cash out in public markets.

 

The landscape here does evolve, but usually its minimal. For instance things actually did start slowing down a but at the beginning of this year. They stopped during covid. I remember having an IPO suspended due to market conditions. And then things went bananas. Usually it just takes some tinkering. The most common way I have seen them do this over the years is adjustments on the warrants. Standard deal gives you 1/3 of a warrant. Ackmans deal is 1/9. I've seen others where things get a little slow offer 1/2 a warrant. So pay attention obviously, but dont overcomplicate it. Especially if your objective is simply to use the pre deal shell as a superior alternative to cash. If you're trading post deal, just remember to stay near the exit for when the music stops.

[Gregmal]

Am going through the book and starting my usual Sunday game planning for the week ahead. Figured I'd list some of the SPAC holdings here to 1) see if anyone else has thoughts on these, 2) help others interested get a handle on some names, and 3) give examples of some of the things discussed earlier in the thread.

 

 

ACEVU, ACICU, CGROU, CFACU, CFIIU, ETACU, FUSEU, SRACU, FSRVU, FTIVU, LATNU, FRXU, LSAQ, SPNVU, CAPAU, IGACU, PTICU, SRSAU, OACBU

 

Now take for instance one I didnt even see had a nice jump....CGROU....This was marketed as a marijuana focused SPAC led by the former CEO of Canopy Growth....and it's popping on rumor that its looking to merge with an Israeli Lidar startup.....I doubt anyone will complain, but that's just kind of how things are going in this space right now.

 

Stable Road, SRACU I've sold a bunch of, but this one too, was supposed to be cannabis focused...not surprisingly it debuted during the cannabis phase 1 bubble....now looking to merge with a space travel company.

 

In the current market, $10-10.2 is now kind of becoming $10.15-10.4. People are catching on. We're also seeing several, such as CFIIU and RBACU finding deals a couple months out of the gate, which is not only unusual, but also kind of brings in the possibility of not having to wait the typical 12-15 months for announcement. Its certainly a unique situation, probably not for everyone although if you really understand it, it should be given how asymmetric and low risk it is, and regarding how long it last...who knows. What people dont seem to understand is that their is literally unlimited institutional demand for these, even prior to the mania. Tell an institution with a conservative focus staring down 0-1% rates that they can park cash with a 2-5% potential short tern return and a guarantee return of principal and they're doing it all day. The biggest hurdle typically when it comes to launching these is finding the required number of shareholders, which IIRC is 300. Generally you'll have 80-90% of the offering taken down by a few institutions/hedgies. Now that Robinhood likes these, there's no telling how many and how long you'll continue seeing these brought to market.

[neil9327]

 

I dont really think that's something most need to be concerned with. I've never seen one go below $10 on a deal announcement, including ones only a couple months away from expiration. The subject you are referring to is largely meant to prevent a more recent phenomenon where you get people kind of colluding together at the last minute trying to get better terms, more warrants, etc. Even in these instances, by the time it gets to this type of situation, you've already had plenty of time to cash out in public markets.

 

 

ok this makes sense. Thanks for the information - very useful.

[Ronchong]

The VW ID.3 seems to be outselling the Tesla 3 in Europe. It will be interesting how the ID.4 (a bigger crossover type vehicle) will do - the base version is supposed to come out in March 2021 in the US.

 

I think we will see quicker adoption than some people think as it looks to me like the tipping point finally has been reached in EV availability and adoption. Ten years from now, I wouldn’t  be too surprised, if the vast majority of new cars sold are EV’s. The UK is already considering a ban for ICE cars starting 2030.

 

If you own a gas station or refinery assets, you are setting on a rapidly melting iceberg, imo.

 

https://www.bloomberg.com/news/articles/2020-11-26/vw-s-id-3-quickly-climbs-to-top-of-europe-s-electric-car-market

 

I think EV sales would eventually follow the way of ICE where different brands dominate in different countries because of different culture. Volkswagen, Renault, Peugeot in the EU; Toyota, Honda, KIA, Hyundai in APAC; Chevrolet, Ford in the US so it may not be that accurate to base the success of a company based on the EV sales in one country.

 

The autonomous robot taxi fleet promised by EVs is also great and all but I just can't see how that can help to justify the valuation now given to the EVs. Eventually, as everyone switch to EVs and deploy their car to work in Uber/Lyft, the law of demand and supply is going to kick in and make the fees of each trip just marginally above the cost of trip.

 

[Ronchong]

Am going through the book and starting my usual Sunday game planning for the week ahead. Figured I'd list some of the SPAC holdings here to 1) see if anyone else has thoughts on these, 2) help others interested get a handle on some names, and 3) give examples of some of the things discussed earlier in the thread.

 

 

ACEVU, ACICU, CGROU, CFACU, CFIIU, ETACU, FUSEU, SRACU, FSRVU, FTIVU, LATNU, FRXU, LSAQ, SPNVU, CAPAU, IGACU, PTICU, SRSAU, OACBU

 

Now take for instance one I didnt even see had a nice jump....CGROU....This was marketed as a marijuana focused SPAC led by the former CEO of Canopy Growth....and it's popping on rumor that its looking to merge with an Israeli Lidar startup.....I doubt anyone will complain, but that's just kind of how things are going in this space right now.

 

Stable Road, SRACU I've sold a bunch of, but this one too, was supposed to be cannabis focused...not surprisingly it debuted during the cannabis phase 1 bubble....now looking to merge with a space travel company.

 

In the current market, $10-10.2 is now kind of becoming $10.15-10.4. People are catching on. We're also seeing several, such as CFIIU and RBACU finding deals a couple months out of the gate, which is not only unusual, but also kind of brings in the possibility of not having to wait the typical 12-15 months for announcement. Its certainly a unique situation, probably not for everyone although if you really understand it, it should be given how asymmetric and low risk it is, and regarding how long it last...who knows. What people dont seem to understand is that their is literally unlimited institutional demand for these, even prior to the mania. Tell an institution with a conservative focus staring down 0-1% rates that they can park cash with a 2-5% potential short tern return and a guarantee return of principal and they're doing it all day. The biggest hurdle typically when it comes to launching these is finding the required number of shareholders, which IIRC is 300. Generally you'll have 80-90% of the offering taken down by a few institutions/hedgies. Now that Robinhood likes these, there's no telling how many and how long you'll continue seeing these brought to market.

 

Yes, Greg is right about the history of how that provision came about, SRAC surprised me too but I sold out of it too early. They have a CEO where he has limited access to the technology of the company yet the market couldn't give a damn.

 

I'm sorry I don't have insights into any of the SPACs listed as my strategy is a little from Greg. I think we can all agree that hot industries like EV, renewables are pretty much uninvestable on a valuation basis so I use SPACs (HCAC, QELL, THCB, NOAC) as a limited-risk exposure to ride the wave on these sectors. They are a little more expensive (I try to buy them below 110% of the cash value) but they offer you a better chance of earning multiples. You got to do what you have to do when you don't have 8 digits like Greg.

[dpetrescu]

From all the near-$10 SPAC options, what is the best way to select investments - assuming about 10 of them. This is from perspective of selling shortly after announcement.

 

What I’ve been doing:

1. Go with the reputable people. Go with the Zillow founder and Peter Thiel and others. But then you pay a premium.

2. By industry - like was previously mentioned. But how do we know if the group will find a good deal. Maybe it doesn’t matter?

3. By region. Asia?

 

Other approaches:

1. Fundamental analysis - impossible

2. Random? Doesn’t matter. As was mentioned you can’t predict the best deals

3. Go with the lowest cost.

 

[dpetrescu]

Also - how does this end? Or what are potential long term risks:

 

1. Funds just won’t find good deals. There are almost 200 funds right now looking for deals. And I heard in an interview at end of this year there are about 2 new SPACs per day. Can they really all find deals? And if they do are there that many great companies out there?

 

2. SPACs will start to behave more like IPOs. They’ll start trading 10% or more over NAV/cash

 

3. Regulatory challenges. If more of them turn out to be like NIO, there will be more regulations for more due diligence and more disclosure about compensation to SPAC managers

 

4. More opportunity for fraud, either with managers looking for the quick 20% pay without care for quality or long term investment (looks like Chamath is going for A-Z). or for private companies to misrepresent finances.

 

Maybe that a worry for the future and not worth worrying about as long as it works now.

[Ronchong]

From all the near-$10 SPAC options, what is the best way to select investments - assuming about 10 of them. This is from perspective of selling shortly after announcement.

 

What I’ve been doing:

1. Go with the reputable people. Go with the Zillow founder and Peter Thiel and others. But then you pay a premium.

2. By industry - like was previously mentioned. But how do we know if the group will find a good deal. Maybe it doesn’t matter?

3. By region. Asia?

 

Other approaches:

1. Fundamental analysis - impossible

2. Random? Doesn’t matter. As was mentioned you can’t predict the best deals

3. Go with the lowest cost.

 

4. Go with reputable people in a favoured industry. It's not exclusive. If you get in early, you can actually get these units close to cash value.

[Ronchong]

Also - how does this end? Or what are potential long term risks:

 

1. Funds just won’t find good deals. There are almost 200 funds right now looking for deals. And I heard in an interview at end of this year there are about 2 new SPACs per day. Can they really all find deals? And if they do are there that many great companies out there?

 

2. SPACs will start to behave more like IPOs. They’ll start trading 10% or more over NAV/cash

 

3. Regulatory challenges. If more of them turn out to be like NIO, there will be more regulations for more due diligence and more disclosure about compensation to SPAC managers

 

4. More opportunity for fraud, either with managers looking for the quick 20% pay without care for quality or long term investment (looks like Chamath is going for A-Z). or for private companies to misrepresent finances.

 

Maybe that a worry for the future and not worth worrying about as long as it works now.

 

I think it's impt how you frame your foray into SPACs. These are NOT investments that you hold for the long term. My answers to you below is not going to amaze anyone. As value-oriented investor (myself included), I think alot of us have a disdain for things like this, whereby we don't feel good when the money made is not through our own analytical skills. You need to recognise that these are limited risk speculative bets that lets you ride on the wave on the market mania and should have no shame about picking money off the floor.

 

1. Depends on how you define good. SPACs are mostly about narratives. There are a lot of companies/promoters that know how to spin a story.

 

2. I agree, it is getting harder and harder to invest in

a promising SPAC near cash value.

 

3/4. Non-issue if you are going to hold it for the short term, you have the $10 downside protection pre-announcement. I mean look at GSX, Nikola. These are clear frauds but nothing is stopping the market from assigning them a valuation in the B's.

 

In short, you are speculating on hypes with downside protection. Doesn't make you feel good but pays the bill.

[Gregmal]

Agree with the above, with one noted exception. Making money always feels good!

 

But yea. Narratives are important but also realize that all these things are run by salesmen focused on promoting narratives. Always a star CEO, a "guy who led XYZ", etc. Up until this year, spac deals were always regarded as crap, typically PE exits that compensate the sponsor regardless, and totally screwed the retail investor.

 

I would say theres no good or bad companies out there; looking it like that is a mistake, theres just good or bad setups.

 

Ive found over the years to stick with the credible book runners or deals of size. Cantor has always been the leader in the space. But this year this bigger guys have really gotten into the game and thats less of an issue. It really doesnt matter right now.

[willie2013]

Was Greg’s AYR SPAC an outlier or are there other names worth buying to hold? DYOW but it would seem some businesses need capital for growth and management expertise and are not being bought for a flip.

[Gregmal]

AYR was a noted outlier. It worked as a SPAC rather than traditional IPO due to regulatory burdens facing MJ companies. Very much a one off IMO. In fact I recall at the time, maybe 12-15 months ago, some of the biggest criticisms of it...was that it was a post deal SPAC. What a difference a year makes, eh?

[Ronchong]

https://www.etfstrategy.com/tuttle-launches-actively-managed-spac-etf-98547/

 

New ETF on SPACs. Suspect this ETF is the reason behind the increase in volatility in SPACs lately. More and more SPACs are starting to trade at 10% - 20% above cash value. Ridiculous!

[Gregmal]

I dont actually think that one is too bad. It seems predominantly pre deal announcement, which is low risk. Much different than SPAK. Its basically what I do on my own, but I suppose not everyone has the time to follow all these damn things. And yea, 10.3-4 is the new 10.05-10.10. Got IIIIU IPO last week and already at 10.4. LSAQ, FLACU, are currently two I like.

 

FSRVU just got a 40% bump on deal announcement so I've cut that one down a bit.

[Ronchong]

I dont actually think that one is too bad. It seems predominantly pre deal announcement, which is low risk. Much different than SPAK. Its basically what I do on my own, but I suppose not everyone has the time to follow all these damn things. And yea, 10.3-4 is the new 10.05-10.10. Got IIIIU IPO last week and already at 10.4. LSAQ, FLACU, are currently two I like.

 

FSRVU just got a 40% bump on deal announcement so I've cut that one down a bit.

 

Yeap, it seems like they are mostly concentrated on pre-deal spacs from their holdings, different from what SPAK is doing. It could be a worthy look for someone who doesn't have time but for the rest of us, it's just ruining the play. I'm afraid 10.3-10.4 is gone too. Seems like 10.6 - 10.7 is going to be the new range. Got really lucky with JIH. They announced a deal immediately the working day after I bought it and went up 7%. IRR of 173823728281817%

 

I like both SOAC and CCAC, both have targets in the hot sustainability sector. SOAC target to close by Q1 and CCAC has been searching for a long while tho both have came up quite the past 2-3 days. Just curious Greg, what do you like about LSAQ and FLAC?

[Gregmal]

The life science/biotech SPAC I like simply because thats a favorably viewed sector. LSACU was/is a double before deal close. The thesis is rather simple in that from 10.5/6 you will likely see some bounces up/down on just normal trading activity and on a deal announcement you'll almost certainly see at least $11/12. You dont need home runs here or even great deals. Just volatility and a deal spike. Which is close to guaranteed in this environment.

 

I was talking with someone earlier about the Social Capital spacs, and the 15-20% premiums on those. And realistically, while I'm not a fan, you still kind of have favorable setups because the behavior of the masses has become predictable. Especially if you are a smaller investor, IE transact in sub 5,000 share lots, you'll almost certainly have an exit opportunity, especially if you are quick after hours upon announcement.

[Ronchong]

The life science/biotech SPAC I like simply because thats a favorably viewed sector. LSACU was/is a double before deal close. The thesis is rather simple in that from 10.5/6 you will likely see some bounces up/down on just normal trading activity and on a deal announcement you'll almost certainly see at least $11/12. You dont need home runs here or even great deals. Just volatility and a deal spike. Which is close to guaranteed in this environment.

 

I was talking with someone earlier about the Social Capital spacs, and the 15-20% premiums on those. And realistically, while I'm not a fan, you still kind of have favorable setups because the behavior of the masses has become predictable. Especially if you are a smaller investor, IE transact in sub 5,000 share lots, you'll almost certainly have an exit opportunity, especially if you are quick after hours upon announcement.

 

Got it, didn't know that the science/biotech is another hot sector so I presume the play here is just on the targeted sector?

 

Now, I don't disagree with your thesis since I'm in the same play as you but I have been thinking about the opportunity cost of SPACs lately. The new SPAC ETF that came out has a AUM of 2B against a total SPAC trust size of approx. 88B so it makes sense that the new SPAC range of 10.5 - 10.6 is also about 1 - 2% higher than the old range of 10.3 - 10.4. Now, I doubt that the market is going to stop at 2 SPAC ETFs seeing how things are going right now so the 10.5 -10.6 range is going to become 10.7 - 10.8 and then 10.8 - 10.9, so on and so fro as more and more SPAC ETFs come online. While this creates an opportunity to front-run the upcoming ETFs but the days of the asymmetrical risk/reward appears to be ending soon. At some point of time, it would no longer make sense to hold recent IPO SPACs at $11 or more.

 

The Social Capital SPACs are in another class of their own but they present another play on it's own. There is this post by gfc in the "what are you buying" thread and the thesis is roughly similar. The plan here would to be to buy into SPACs with best-in-class management and wait for the RH crowd to become "aware" of the SPAC. Case in point. One unit of AJAX could be bought below 10 when it first IPO-ed and yesterday it just closed at 12.50 without any news. This way, u get to clip your 10 - 20% without even having to wait for the deal announcements!

[Gregmal]

Yea I think the opportunity(defined as a reasonable or better skew in terms of risk/reward) is almost gone. Its harder to find for sure. This stuff doesnt last forever so when you see it you need to act. Here it was/is rather no brainer. Sub 5% downside, cut and dry. Many cases 1% or less. All good things do come to an end.

[scorpioncapital]

biotech is in a bubble just as big as ev and fuel cells..I've had some 300-800% gainers in less than 6 months which is obviously insane.

 

"A lot of times, SPACs trade up on announcement of a merger not even the approval"

 

even more than that , I've seen spacs trade to 11 or 12 from 10 IPO even before announcement of anything at all! (eg cmlf).

[LearningMachine]

I think we will see quicker adoption than some people think as it looks to me like the tipping point finally has been reached in EV availability and adoption. Ten years from now, I wouldn’t  be too surprised, if the vast majority of new cars sold are EV’s. The UK is already considering a ban for ICE cars starting 2030.

 

If you own a gas station or refinery assets, you are setting on a rapidly melting iceberg, imo.

 

Imagine 100% of cars sold this year were EVs.  Total car and light truck sales per year are around 17 million in the U.S..  There are a total of 274 million registered vehicles in the U.S.  In that draconian scenario, it will still take 16 years to replace the fleet.

 

If you are projecting it will take a decade to hit 50% of sales to be EV, when do you think we will hit 100% sales to be EV?

 

My point is we have many many years ahead of usage of high quality refinery and gas station assets.  The lower quality ones will start shutting down first.

 

I think we have to handicap percentage reduction in volume of gas by timeline.

[dpetrescu]

Sounds like we might want to rename this or start a SPAC thread. Over the last few weeks I’ve transferred quite a lot of idle cash into SPACs, not as an investment, more as a special situation given the limited downside if you do get in close to NAV. Surprised how fast Peter Thiel’s SPAC was announced (although it might or might not move forward). Even in the last weeks a lot of the high high profile ones have moved above 11. I guess that answers my original question - how does this unique opportunity end? They start trading like IPOs and start out at a high premium above NAV on day 1, to the point where the average potential/likely upside gets averaged into the pre-announcement SPAC premium. With that said, as of now, today there are still quite a lot of SPACs out there with great managers near NAV. It would be great to compile a list with a short description. I’ll add mine once I get my sketchpad back.

[Ronchong]

Sounds like we might want to rename this or start a SPAC thread. Over the last few weeks I’ve transferred quite a lot of idle cash into SPACs, not as an investment, more as a special situation given the limited downside if you do get in close to NAV. Surprised how fast Peter Thiel’s SPAC was announced (although it might or might not move forward). Even in the last weeks a lot of the high high profile ones have moved above 11. I guess that answers my original question - how does this unique opportunity end? They start trading like IPOs and start out at a high premium above NAV on day 1, to the point where the average potential/likely upside gets averaged into the pre-announcement SPAC premium. With that said, as of now, today there are still quite a lot of SPACs out there with great managers near NAV. It would be great to compile a list with a short description. I’ll add mine once I get my sketchpad back.

 

I probably should, when I find out how to change the topic.

 

I'm pretty much using SPACs as a form of cash alternative as well, I have about 50-60% of my portfolio spread over a basket of SPACs. Including SPACs, I'm about 100% invested, this leaves me around 20-30% of margin conservatively, backed against my SPACs, to add to my other positions if the market goes down. Thiel's SPAC is a sign of the beginning of the end, 60% above cash value for a company that may end up going the IPO route is madness. I think you have laid out the end game of the SPACs extremely well.

 

Let me start, a couple of the SPACs near NAV that I have on my list are:

XPOA

CCAC

FUSE

AVAN

 

[Spekulatius]

I think we will see quicker adoption than some people think as it looks to me like the tipping point finally has been reached in EV availability and adoption. Ten years from now, I wouldn’t  be too surprised, if the vast majority of new cars sold are EV’s. The UK is already considering a ban for ICE cars starting 2030.

 

If you own a gas station or refinery assets, you are setting on a rapidly melting iceberg, imo.

 

Imagine 100% of cars sold this year were EVs.  Total car and light truck sales per year are around 17 million in the U.S..  There are a total of 274 million registered vehicles in the U.S.  In that draconian scenario, it will still take 16 years to replace the fleet.

 

If you are projecting it will take a decade to hit 50% of sales to be EV, when do you think we will hit 100% sales to be EV?

 

My point is we have many many years ahead of usage of high quality refinery and gas station assets.  The lower quality ones will start shutting down first.

 

I think we have to handicap percentage reduction in volume of gas by timeline.

 

How much reduction in gas demand do you need to make refining and to a lesser degree distribution a crappy business due to margin pressure -  that’s the key question not when 90% of the gas demand disappears.

 

Prior to the shale becoming a factor, refining had a lousy decade due to overcapacity. This could well happen again.

[LearningMachine]

I think we will see quicker adoption than some people think as it looks to me like the tipping point finally has been reached in EV availability and adoption. Ten years from now, I wouldn’t  be too surprised, if the vast majority of new cars sold are EV’s. The UK is already considering a ban for ICE cars starting 2030.

 

If you own a gas station or refinery assets, you are setting on a rapidly melting iceberg, imo.

 

Imagine 100% of cars sold this year were EVs.  Total car and light truck sales per year are around 17 million in the U.S..  There are a total of 274 million registered vehicles in the U.S.  In that draconian scenario, it will still take 16 years to replace the fleet.

 

If you are projecting it will take a decade to hit 50% of sales to be EV, when do you think we will hit 100% sales to be EV?

 

My point is we have many many years ahead of usage of high quality refinery and gas station assets.  The lower quality ones will start shutting down first.

 

I think we have to handicap percentage reduction in volume of gas by timeline.

 

How much reduction in gas demand do you need to make refining and to a lesser degree distribution a crappy business due to margin pressure -  that’s the key question not when 90% of the gas demand disappears.

 

Prior to the shale becoming a factor, refining had a lousy decade due to overcapacity. This could well happen again.

 

I agree Refining is not a great business in general.  We already have extra capacity in Refining.  Many lower quality refineries have already been running below capacity or being shut down. Yet, some operators are able to make some money off the higher quality refineries or because of their direct access to retail channel, while allocating that capital earned to a better business.

 

I don't think we will get a high enough percentage in gas demand reduction due to EV sales alone in the next five years to worry about good operators given EV sales replaced only about 0.320 million of the 274 million registered vehicles in 2019, i.e. 0.12% of the fleet replaced in one year.  Let's assume EV sales grow 30% per year to 1.18 million sales in five years.  Then, that year, we'll replace 1.18/274 = 0.4% of the fleet.