Yea, official F1 site just announced, even though the news broke hours ago. Official Ferrari site now confirming that the contract with HAM is for 2 years with an option for a 3rd so it will bring him into the new formula in 2026 and perhaps beyond.

 

Lewis is a generational talent, and I expect he and Leclerc will be electrifying.

Is it a good decision? Always impossible to tell until afterwards. However, I am happy for it as it will mix things up and generate a lot of interest.

I was one of the people who (erroneously) thought Lewis was making a mistake when he left McLaren and it turned out to be a superbly timed move. I wonder what may be playing behind the scenes this time.

 

thanks. i was not aware of that. man, this really has to change the dynamics in the team now.

"george, you're our man now! what do you need?"

 

 

I'm sure Hamilton thinks this is all a result of the driver announcement. The rest of the world realizes the Ferrari's earnings announcement might have some effect as well...

Ferrari finishes a record year by topping Wall Street’s estimates

 

Perhaps there’s a combination of both but the stock had formed a double top and rallied 20% from Nov to Dec. Typically a sale is on the news and buy on the rumor. Forward P/E before today was between 50-55X; for perspective, even the best tech stocks don’t sell at those multiples. Apple and Microsoft P/E are 30 & 36X respectively.

 

Exactly.

In this case (before the HAM formal announcement on F1.com), the rumor (HAM) was outpacing the news (earnings report).

 

Does anyone beside me think that Lewis might drive for Ferrari this season, 2024?

It is highly unusual to announce a driver switch this early. Will Toto just let Lewis go now and avoid a whole season of weirdness? It seems like something has happened in Toto and Lewis' relationship.

 

I wonder about that as well. Lewis has one foot out the door so that is going to create a strange environment within the team. Over at Ferrari, Sainz knows he's dead man walking so that will be a strange dynamic. If MB would consider Sainz for the seatin 2025, why not offer Ferrari a cash plus Sainz trade for Lewis and just do it now. I don't remember there ever being a situation like this. Sure, after the summer break, but not 6 weeks before the start of the season before the move will happen.

 

this is exactly what i'm wondering. things are going to be awkward at best. problem is sainz is still in the seat with no place to go.

this will certainly be interesting to watch unfold. i have to think merc is going to put all their focus on GR now. lame duck season for lewis.

 

Don't get caught up on the formal announcement on F1.com because they were very late to announce. My phone was blowing up from people in Germany and Portugal with the news and many hours before the US markets opened. Just a couple hours into US trading the stock was up 6.5% and finished 12.5% higher, hence why I say it might be a combination of 2023 4thQ earnings report and this announcement on LH. The sponsorship and commercial side of the ledger can't be ignored as that side, along with merchandise, brings in anywhere from half to equal amounts of revenue to Ferrari as they do in selling cars.

This was from a July 2022 piece.

How does Ferrari make their money?

Ferrari has profit margins well beyond the traditional car manufacturers. Maybe this is because they charge a premium for their vehicles compared with VW group, Daimler and Ford. The biggest contributor to this healthy margin is not their cars – it is their merchandise. Ferrari is much closer to a luxury goods manufacturer like Louis Vuitton or GUCCI than it is to Ford or VW.

How much does Ferrari make from merchandise?

Ferrari produces around $4 billion dollars in sales revenue every year – $2bn of which comes from merchandise. This ranges from model cars, branded caps, and flags all the way up to high-end luxury fashion goods like a £3,500 leather trench coat… not my style but someone must be buying it.

This is all reflected in how the stock market values Ferrari versus the mainstream companies. Ford is currently valued at 2.8x annual earnings and VW at 4.71x whereas investors are happy to pay a much bigger premium for Team Red at a whopping 36.3x earnings.

So, let’s prove my point – Louis Vuitton Moet Hennessey is running at 23.4x, Dior at 20.3x and Hugo Boss at 20.2x. Substantially closer to Ferrari than their automotive “competitors”.

One of the biggest driving forces, pardon the pun, for the brand domination was Michael Schumacher. As one of the biggest and greatest sportsmen of all time – his victories behind the wheel resulted in unfathomable merchandise sales during his reign as champion.

Despite the above – looking into the Ferrari business model car sales are now catching up with their merchandise sales. Their split with design house Pininfarina a few years ago means they now longer stick with the 3-car arrangement of one mid-engine, one front engine, and one hyper-car. Instead, they now have numerous models at varying price points and in the last few weeks announced the production of their first SUV.

https://www.acumenfinancial.co.uk/bu...so-successful/

 

Remember one thing: for the team, the WCC is everything. Obviously having a driver win the WDC is also great, but if you can have two drivers consistently finish in the top 3-5 and amass enough points to win the WCC, it sure makes the ‘sting’ of one of those drivers not being the WDC a lot less painful. Perhaps in MB viewpoint, no longer ‘painful’ at all.

 

This is super interesting; thanks for posting it.

One can only wonder that in this age of the ‘Influencer’ and Social Media, and given Lewis’ popularity World wide; (although not on Rennlist! lol), the accountants at Ferrari must be frothing at the mouth over the opportunities in the near future to markedly increase sales of merchandise.

 

These are the same Mafalda Corta that sell 458 brakes (crappy ones, same as those on a ZR1) but for 3 X the price. And $200 air filters.

Good looking, stylish air filters, mind you

Cheers

Matt

 

I didn't believe it until this: