CCC Intelligent Solutions (CCC). The Machine That Totals Your Car Just Got Put on the Lift.
Akre paid $10.09. It trades at $5.82. Morgan Stanley is shopping the whole company. Earnings land Thursday.
The most important second of your car’s life happens without you.
Your car is hit. The adjuster shows up two days later. He does not walk around the wreck with a clipboard. He opens a laptop.
The software already knows. It knows what 7.6 million comparable vehicles sold for. It knows the parts prices this week, the labour rate in your county, 41,000 municipal tax rates, 53,000 state fees. It has watched every collision repair in America for forty five years.
It runs one comparison. Cost to fix, against what the car is worth.
A number appears. Your car is dead. You had nothing to do with it.
That software is made by a company called CCC. You have never heard of it. Twenty seven of the thirty largest auto insurers in America run on it. So do thirty thousand body shops. A hundred billion dollars of claims cross it every year.
Few days ago I wrote about the company that hauls the corpse away.
This is the company that signs the death certificate. Two businesses, billing in the same second. One computes the verdict. The other sells the body.
Chuck Akre owns both.
And he is bleeding on both. He paid an average of $41.42 for Copart, which trades at $27. He paid an average of $10.09 for CCC, which trades at $5.82. Down on one, down on the other. He funded both by selling Mastercard, Visa and Moody’s near their all time highs.
Last quarter he bought more of both.
Then, on July 9, Reuters broke a story. CCC has hired Morgan Stanley and is calling private equity firms about selling the entire company.
Charlie Munger had a favourite question for moments exactly like this. When you find an extreme case that makes no sense on its face, he said, you stop and ask it out loud.
“What in hell is going on here?”
I ran CCC through its own algorithm. Cost to fix, against what it is worth. Every section below is one field on the claim form.
The verdict prints at the bottom. It is not the one I expected to write.
