May 15th is Gas Day

by Johnny Debacle

From a friend, I received this forward yesterday morning:

Subject: No gas on May 15

NO GAS…On May 15th 2007

Don’t pump gas on MAY 15th

In April 1997, there was a “gas out” conducted nationwide in protest of gas prices. Gasoline prices dropped 30 cents a gallon overnight.

On May 15th 2007, all internet users are to not go to a gas station in protest of high gas prices. Gas is now over $3.00 a gallon in most places.

There are 73,000,000+ American members currently on the internet network, and the average car takes about 30 to 50 dollars to fill up.

If all users did not go to the pump on the 15th, it would take $2,292,000,000.00 (that’s almost 3 BILLION) out of the oil companies pockets for just one day, so please do not go to the gas station on May 15th and lets try to put a dent in the Middle Eastern oil industry for at least one day.

If you agree (which I can’t see why you wouldn’t) resend this to all your contact list. With it saying, ”Don’t pump gas on May 15th”

Chug Chug ChugThe idiocy in this message is rampant. You cannot drop the price of gas by $0.30 by having some small % of drivers effectively defer their purchases a day. Drivers do not even make up the whole gasoline market! And that’s a 10% move in price per a gallon! Also the concept of “protesting gas prices” is akin to “protesting gravity.” These things aren’t set to gouge you, they are set to balance supply and demand for people who need gas even more than you do.

Then we get to the math. There are 78 million “internet network members” and it costs $30-50 to fill up a tank so that it would cost $2.3bn (since when is $2.3bn close to $3bn????) to the “Middle Eastern oil industry”. Except that the avg consumer fills up their tank about every other week, or 1 in 14 days. So if everyone who was likely to fill up their tank on May15th were to not fill up their tank on May 15th, ceteris paribas, there would be a ~$165 million impact. But what would this impact really entail? It’s likely that the majority of the people who didn’t buy gas on May 15th would have to buy it at some point, right? Or else how are the going to get to their job as Chief Pastry Engineer at Au Bon Pain? So say that 90% of that gas is deferred until at most two weeks in the future. Now we are down to a $16.5 million impact.

Who would this hurt? The “Middle Eastern oil industry”? Probably not, whoever that is. The most likely people hurt would be retail gas locations which are frequently run by individual entrepreneurs. These storefronts are are the dominant source of gasoline for consumers. Say there are 150,000 retail gas station in the US. On May 15th, they would have a normal business day except they would lose some small percentage of their normal volume despite having the same overhead costs. This volume would be mostly recouped later in the next two weeks. They would lose money. About $120 each. Way to stick it to the man…the middleman.

Recommendation: In order to combat the FUD of anti-market practitioners, we urge all Americans and all patriots to fill up your tank on May 15th. In fact, fill up all your tanks, your lawnmower, your scooter, your jetski, your gas power snow blower, everything that consumes gasoline should be topped off on May 15th. Let’s see how high we get these prices to go. Make May 15th national gas day. For every person you forward this post to, Microsoft’s Bill Gates will pay you $245 in naira.

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  1. HarlemHaberdasher
    May 7th, 2007 | 12:05 pm

    Hilarious article. Your analytical powers are strong.

    By the way, I wanted to mention a few things.

    First: you need an “Investor Relations” link on your toolbar on the left. This morning I started looking for the transcripts from your past earnings calls and I was able to find them only with difficulty.

    Second: Why was I looking for your past earnings calls? Because I sensed a serious overvaluation of LongOrShort in the market, and wanted to confirm my suspcions. Consider them confirmed: according to

    the market is pricing your firm at $83,551.92, a ludicrous 113 times TTM operating cash flow.

    Recommendation: short LongOrShort.

    Sorry to short you guys in public, but efficient markets gotta do what efficient markets gotta do.

  2. May 7th, 2007 | 12:54 pm

    Our 113 LTM operating cashflow multiple is inline with our peer group average of 113 LTM operating cashflow multiple. We’re comfortable with this because we think we are at the least, as good as our peer group, if not better in terms of how well positioned this company is for growth.

  3. HarlemHaberdasher
    May 7th, 2007 | 1:26 pm

    Relative valuation is for suckers who buy into bubbles.

    I’m as big an LoS fan as there is, and I think your growth prospects are fantastic (I’m sure Rupert Murdoch will come knocking soon), but 113 multiples are why the Dutch invented shorting.

  4. Reverse Crush
    May 7th, 2007 | 3:12 pm

    Sure they invented shorting, but then they kept changing their names on the trade slips so nothing ever cleared. “Holland”, “Netherlands”, the “Dutch”. Right.

  5. Cincinnatus_C
    May 7th, 2007 | 5:05 pm

    ” but 113 multiples are why the Dutch invented shorting.”

    i wonder why the dutch created invented ovens.

  6. May 7th, 2007 | 6:04 pm

    Hey Cinci, can you give guidance as to whether that’s a setup for a pancake joke or a holocaust joke? Thanks, it’s for my model. Great quarter btw.

  7. May 7th, 2007 | 8:10 pm

    This analysis is seriously flawed with respect to the potential consumer impact of a boycott of gas at the retail level for 24 hours and you seriously overestimate the impact on several levels. My corrections are below:

    Your analysis depends primarily on an assessment of the internet impact of boycott marketing. This totally ignores the secondary word-of-mouth (the stickier and more effective- because it is more personal- method of proliferating boycott signals).

    Accordingly, taking the optimistic case, it is fair to say that the population of gas consumers is limited only by the number of registered motor vehicles in the United States today. (One assumes that hulks in the front yard in South Carolina have not been registered in many years if they are not in use).

    2004 studies by the department of transportation indicate that this number is exactly 243,023,485 with a margin of error of +/- 0.00%. (See: link)

    Further, your analysis assumes an equal distribution of gas fill-ups across days. This is, of course, false, as Mondays are the most lucrative for filling stations. (After driving the bloodsucking wife and screaming children out to the weekend retreat of choice without a moments peace and wondering why, in the name of all things holy, you allowed yourself to be persuaded to undertake such a journey only to be forced to return home four hours late in the face of horrific Sunday traffic, the very LAST thing you do is to decide to cap the evening off by filling up the tank of the BMW 7 series before work in the morning).

    Assuming a 20% spike in gas consumption on a Monday, Tuesday will, admittedly, fall into the wake of a low consumption. Perhaps it is even lower than the remaining 13% or so per day average that the week offers filling stations. It seems safe to assume that 10% might be a good figure for Monday fill-ups.

    That leaves us with 24,302,348.5 automobiles to participate in our boycott.

    Given your assumption of $30-$50 per car for fill-up (I have no information on this assumption since I use my American Express Card and have no concept of small purchase pricing) that seems to suggest a boycott potential of $972,095,360 at 100% boycott penetration.

    Given that there are 195,455 filling stations in the United States (checking against the NAICS code for Gas Stations [447190] and discounting the 1200 that offer the environmentally friendly E85), we have 194,255 potential boycott targets. The result is a SIGNIFICANT $5004.20 in deferred revenue.

    Assuming sophisticated cash management techniques are used by filling stations (they can command an overnight rate of 8.65% with the Columbian Central Bank) there is a $43,286.53 loss of float per year which means each filling station is looking at a one day float exposure of $118.59.

    Your analysis is usually quite good, but in this case you are off the mark enough with your absurd $120.00 GUESS to offend me.

    Shape up.

  8. Cincinnatus_C
    May 7th, 2007 | 11:21 pm

    “Hey Cinci, can you give guidance as to whether that’s a setup for a pancake joke or a holocaust joke? Thanks, it’s for my model. Great quarter btw.”

    actually it was a reference to Dutch Ovens.

  9. CatHairSweater
    May 9th, 2007 | 1:58 pm

    This analysis, and that of Equity Privat is glorious!

    Now, I would like to make a market for you LoS fans.

    +/-10.5pts is the spread…and the market is:

    If the market were to, say, thin the herd of weaklings who believe the boycotting drivel, how many points will the collective average IQ of America increase?


  10. May 9th, 2007 | 3:09 pm

    10.5 sounds about right, but plenty of IQ strong people would also be culled.

  11. harvey
    May 17th, 2007 | 10:58 am

    May 17 2007: 8:40 AM EDT
    NEW YORK ( — Gasoline prices hit a record high for the fifth straight day Thursday, according to the daily reading on gas prices from AAA.

    I guess our little gas-out didn’t work two days ago. Maybe this is your fault, LoS, because you publicly shorted us!!

  12. May 17th, 2007 | 11:04 am

    I assume that the unstated reason for those highs was the throngs of LoS readers who obeyed the JD.

  13. Sean
    May 18th, 2007 | 3:17 am

    I told the manager of one of the gas stations (in rural Alaska; they don’t even advertise the prices) to manage to raise her prices to the standard margin level. Instead, she raised them thirty cents higher than that. Fear my evil powers.