Tommys vs Malibu

[DAI]

On 4/18/2024 at 11:10 AM, NorCalSurfer said:

My local Tommy’s said all sales go through M&T Bank. 

 

3 hours ago, dalt1 said:

Here is what Knoxville sent me on a 2024 LSV23. $183,700 out the door.

If the first quote is true, “their” 4% doesn’t matter.  It’s what M&T is willing to take.

Edited April 26 by DAI

[Horns1]

DAI, that pretty close to the out the door they showed me, but mine was on a 2023.  Dealers who are still Malibu dealers showed me 28% off left over 2023 & they didn't have the BS $5000 Prep & Freight Fee added in.  I will say, the guy I talked to said don't be afraid to show me a lower offer.  

Edited April 26 by Horns1

[dshack]

4 hours ago, dalt1 said:

Here is what Knoxville sent me on a 2024 LSV23. $183,700 out the door.

Assuming you have a local dealer other than Tommys, I bet you could get close to that price/discount from them. And not have to deal with hassles of shipping, warranty, or (potential) bankruptcy.

[dalt1]

3 hours ago, dshack said:

Assuming you have a local dealer other than Tommys, I bet you could get close to that price/discount from them. And not have to deal with hassles of shipping, warranty, or (potential) bankruptcy.

Got 30% off from my last deal with local. Don't plan on going back there though.

[The Hulk]

Why would any of you think M&T is ready to wheel and deal yet? This just happened and the boating season is just beginning..

Wait till end of season ..well actually later when they get desperate and want to write off their losses! The real deals are far off ie the 50-70% off ones

They have to make 4%?? Ha banks would die to make 2-3% right now with massive deposit flight due to Uncle Sam tax time just hitting.. banks are mostly already insolvent I'd sit back and wait..  

I feel bad for Malibu dealerships this is going to steal a lot of sales away that they won't be able to match in the near future.. as those dealerships continue to finance their sales price will rise causing problems for 2025 model price vs unsold 2024 prices.

This is NOT an insignificant amount of inventory given the current economic conditions..  if current trends continue this could equate to 50% reduction in Malibu unit sales since Tommys was already 33% during the good times... 

 

 

 

 

 

[MikeR397]

So if Tommy’s goes belly up later this year, does Malibu contract out warranty and service work to competing dealers in the area? Im generally pretty DIY competent and plan to service my own boat, but if a $5k screen goes out how does that get warranty service? 

Edited April 28 by MikeR397

[The Hulk]

Malibu should buy this inventory back to maintain market stability especially considering the fact that stagflation is here and all commodities and prices will continue to skyrocket for the foreseeable future. these units will have been built at lower cost than next models and they already made $ selling them once. They can surely sit back and wait until M&T gets desperate then buy them all at a steal.

Didn't someone once say "If you owe the bank $1m your screwed, if you owe the bank $100m the bank is screwed" haha .

it would be unfair to let the bank off the hook without major losses for their genius approval that got Tommys here in the first place..

IMO, Tommy's is fine and done, M&T's got problems but you're tax $ will bail them out if needed so their Fine, and Malibu has to figure out how bad they want to PO the other 66% of their existing dealerships which is now actually 100% of their current dealerships.
 

Seems Malibu is the one with the problem here and uncle Sam isn't bailing BU out.

Edited April 28 by The Hulk

[Sixer]

8 hours ago, The Hulk said:

Why would any of you think M&T is ready to wheel and deal yet? This just happened and the boating season is just beginning..

I guess I don't understand how these things work, but in my mind they should see the writing on the wall and be pricing a little more aggressively than they currently appear to be.  Everyone is aware of the lawsuits, and the current situation around Malibu.  Huge inventory at Tommy's, and there are a lot of guys on here who can get 30% off a custom build with their local dealers.  Why would anyone buy from Tommy's at the same/similar % off with no guarantee of dealer service?  Lots of boats sitting on lots.

[DAI]

2 hours ago, The Hulk said:

Malibu should buy this inventory back to maintain market stability especially considering the fact that stagflation is here and all commodities and prices will continue to skyrocket for the foreseeable future. these units will have been built at lower cost than next models and they already made $ selling them once. They can surely sit back and wait until M&T gets desperate then buy them all at a steal.

Didn't someone once say "If you owe the bank $1m your screwed, if you owe the bank $100m the bank is screwed" haha .

it would be unfair to let the bank off the hook without major losses for their genius approval that got Tommys here in the first place..

IMO, Tommy's is fine and done, M&T's got problems but you're tax $ will bail them out if needed so their Fine, and Malibu has to figure out how bad they want to PO the other 66% of their existing dealerships which is now actually 100% of their current dealerships.
 

Seems Malibu is the one with the problem here and uncle Sam isn't bailing BU out.

M&T is publicly traded.  The number I saw thrown around in the thread was ~$75MM in loan value to Tommy’s (500 units at $150k?).  M&T bank has Q1 2024 total loans outstanding of ~$134BN, with ~$90BN being commercial loans, and ~$2.2BN reserved for loan losses.  

Edited April 28 by DAI

[DAI]

9 hours ago, The Hulk said:

Why would any of you think M&T is ready to wheel and deal yet? This just happened and the boating season is just beginning..

Wait till end of season ..well actually later when they get desperate and want to write off their losses! The real deals are far off ie the 50-70% off ones

They have to make 4%?? Ha banks would die to make 2-3% right now with massive deposit flight due to Uncle Sam tax time just hitting.. banks are mostly already insolvent I'd sit back and wait..  

I feel bad for Malibu dealerships this is going to steal a lot of sales away that they won't be able to match in the near future.. as those dealerships continue to finance their sales price will rise causing problems for 2025 model price vs unsold 2024 prices.

This is NOT an insignificant amount of inventory given the current economic conditions..  if current trends continue this could equate to 50% reduction in Malibu unit sales since Tommys was already 33% during the good times... 

 

 

 

 

 

 

22 minutes ago, Sixer said:

I guess I don't understand how these things work, but in my mind they should see the writing on the wall and be pricing a little more aggressively than they currently appear to be.  Everyone is aware of the lawsuits, and the current situation around Malibu.  Huge inventory at Tommy's, and there are a lot of guys on here who can get 30% off a custom build with their local dealers.  Why would anyone buy from Tommy's at the same/similar % off with no guarantee of dealer service?  Lots of boats sitting on lots.

I don’t see a bank waiting for an end of a season to put this behind them. They are not in the business of selling boats, and this is just a headache and distraction. 

[PNWoke]

Is there any chance the US gov bails out M&T then takes all the Bu’s and sends them to Zelensky’s war effort? A fleet of militarized Bu’s would probably be money well spent compared to the rest of the war effort so far 🤣.

[tjklein]

Tommy's is local to me and where I bought my last boat, which was actually Waterski America then. (they were solid, worse since they got bought out)

Anyway, they sent me 2 quotes and they were just over 30% off, but close to $5k for shipping and prep. This was on a '23. Not a great deal considering the situation.

[oldjeep]

19 minutes ago, tjklein said:

Tommy's is local to me and where I bought my last boat, which was actually Waterski America then. (they were solid, worse since they got bought out)

Anyway, they sent me 2 quotes and they were just over 30% off, but close to $5k for shipping and prep. This was on a '23. Not a great deal considering the situation.

Maybe silly question, but 5k ship/prep would drop the 30% to what?  5k on bazillion dollar boats is not all that significant.  Still have a hard time wrapping my head around boat prices - daughter just bought a 3br/2ba house for under what some of them cost.

[PNWoke]

10 minutes ago, oldjeep said:

Maybe silly question, but 5k ship/prep would drop the 30% to what?  5k on bazillion dollar boats is not all that significant.  Still have a hard time wrapping my head around boat prices - daughter just bought a 3br/2ba house for under what some of them cost.

These boats are nice but you definitely can’t live in them.  That said I do know quite a lot of younger people who (because of the housing market) plan to stay with parents but make enough money to buy boats and other toys rather than waste money on crazy overpriced starter homes.  One friend of mine started spending money on high end cars, flipping them and is now driving exotics and supercars.  I met him at a beach out boating.  He liked my Bu and was considering expanding that business into the high end marine side of things.  He ended up sticking with lambos annd Ferraris and recently bought a house in Miami with the profits.  Many roads to wealth!

[jjackkrash]

3 hours ago, The Hulk said:

Seems Malibu is the one with the problem here and uncle Sam isn't bailing BU out.

Looking specifically at the Tommy's issue--and without any specific knowledge--if the boats have been delivered then the factory was most likely paid either at the time they were loaded on the truck or when they were unloaded at Tommy's.  So the factory has already sold (and been paid for) every boat at issue.  Which doesn't mean Malibu doesn't have problems, but getting paid up front for the Tommy's boats isn't likely one of them.

[jjackkrash]

1 hour ago, DAI said:

 

I don’t see a bank waiting for an end of a season to put this behind them. They are not in the business of selling boats, and this is just a headache and distraction. 

I have not closely followed what's happening on the ground but if we are talking huge numbers of boats and Tommy's is out of trust, then I'd be surprised if the bank doesn't have say over the sales or that a receiver has not been appointed to control the sale of the collateral with court supervision.  And if there are creditors owed money in addition to the bank then the person or entity controlling the collateral sale could/would most likely have some duty to reasonably maximize value to protect all creditors.  I am sure it is a complicated mess.  

Edited April 28 by jjackkrash

[Bozboat]

1 hour ago, DAI said:

M&T is publicly traded.  The number I saw thrown around in the thread was ~$75MM in loan value to Tommy’s (500 units at $150k?).  M&T bank has Q1 2024 total loans outstanding of ~$134BN, with ~$90BN being commercial loans, and ~$2.2BN reserved for loan losses.  

Banks report numbers quarterly to the FDIC in a “Call Report.”  It would be reasonable to expect banks to work toward mitigating anything statistically significant that would bring down the quarterly numbers. 

[DAI]

14 minutes ago, Bozboat said:

Banks report numbers quarterly to the FDIC in a “Call Report.”  It would be reasonable to expect banks to work toward mitigating anything statistically significant that would bring down the quarterly numbers. 

I wouldn’t consider <0.1% of total outstanding loans to be significant, or ~3.5% of what they have on their B/S for loan losses.  But I’m not in the banking industry, so I could be wrong.  Either way, I would not expect the Tommy’s situation to cause the bank to go look for a bail out from Uncle Sam (which was initially suggested as a potential).

Edited April 28 by DAI

[oldjeep]

1 hour ago, PNWoke said:

These boats are nice but you definitely can’t live in them.  That said I do know quite a lot of younger people who (because of the housing market) plan to stay with parents but make enough money to buy boats and other toys rather than waste money on crazy overpriced starter homes.  One friend of mine started spending money on high end cars, flipping them and is now driving exotics and supercars.  I met him at a beach out boating.  He liked my Bu and was considering expanding that business into the high end marine side of things.  He ended up sticking with lambos annd Ferraris and recently bought a house in Miami with the profits.  Many roads to wealth!

I guess that works if you are ok with kids living with you forever;) Our deal was, you can stay as long as you are doing serious saving for a house.  Otherwise the rental market is your oyster.

[Steve B.]

Guessing no dealer can sell any new boat at any old price they want to. No way and large corp would allow a dealer to undercut their other loyal dealers. Wishful thinking.

[oldjeep]

1 minute ago, Steve B. said:

Guessing no dealer can sell any new boat at any old price they want to. No way and large corp would allow a dealer to undercut their other loyal dealers. Wishful thinking.

Except that Tommy's is not a dealer any more.

[The Hulk]

1 hour ago, jjackkrash said:

I have not closely followed what's happening on the ground but if we are talking huge numbers of boats and Tommy's is out of trust, then I'd be surprised if the bank doesn't have say over the sales or that a receiver has not been appointed to control the sale of the collateral with court supervision.  And if there are creditors owed money in addition to the bank then the person or entity controlling the collateral sale could/would most likely have some duty to reasonably maximize value to protect all creditors.  I am sure it is a complicated mess.  

Exactly someone's bonus is based on how little M&T looses... They aren't going to wheel and deal immediately.. as mentioned banks are not in the business of selling boats... So they will likely need to come down a bit soon and will likely come down more as it progresses.. soon they become a liability and we still don't exactly know if all or some of Tommy's locations are separate entities which may/ could charge storage fees to M&T !?!?!?

[PNWoke]

1 hour ago, oldjeep said:

I guess that works if you are ok with kids living with you forever;) Our deal was, you can stay as long as you are doing serious saving for a house.  Otherwise the rental market is your oyster.

Yeah this method seems to work if you’re part of the upper middle class and above.  In my anecdote the guys parents were decently wealthy by todays standards and had multiple houses that he and his siblings could live in while they built their businesses and waited out the housing crisis.  I know a few guys that live with their parents and own expensive fishing boats and do so in much less glamour and style but seem to make it work so who knows 😂.

[PNWoke]

1 hour ago, Steve B. said:

Guessing no dealer can sell any new boat at any old price they want to. No way and large corp would allow a dealer to undercut their other loyal dealers. Wishful thinking.

I’m with you, this is the way it SHOULD be run.  But sadly this isn’t how modern corporations do business anymore.  All they care about is stock price.  So the only thing that will incentivize them to buyback those boats and control the market price will be the risk of a long term stock price slump if they don’t buy them back.  It would be a tough pill to swallow to take all that money they’ve been paid already for the boats in Tommy’s possession and give a lot of it back to them (M&T) just to keep market prices inflated for a few seasons.  I could definitely see them keeping the money, cutting output at the factory the next couple years and increasing their incentives to dealers to compensate for their losses while the pricing evens back out over the next few years.  In the long run many of their dealers will end up reselling the cheap boats from M&T.  Someone will get a good price from M&T, then it will get traded in and resold 10 more times.  If Malibu wins their case I doubt they worry too much about the extra boats M&T is holding.  MBUU shares will get hit the hardest if they are found liable for the damages Tommy’s did to M&T.  

[MikeR397]

4 hours ago, tjklein said:

Tommy's is local to me and where I bought my last boat, which was actually Waterski America then. (they were solid, worse since they got bought out)

Anyway, they sent me 2 quotes and they were just over 30% off, but close to $5k for shipping and prep. This was on a '23. Not a great deal considering the situation.

This industry msrp pricing is just plain stupid. 30% off msrp deals as standard, why? Just reduce sticker by 20% and give another 0-5% off like a luxury car dealer does in general, 8% if it’s old stock. 
 

what other industry routinely sells at 20-30% off? Is this to make people think they are getting a “deal?”