Look in the mirror and identify your company culture

“Company culture” is a buzzword that’s been around for a while, but your culture may never have mattered as much as it does in today’s transparency-driven business arena. Customers, potential partners and investors, and job candidates are paying more attention to company culture when deciding whether to buy from a business or otherwise involve themselves with it.

To determine whether yours is optimal for your long-term goals, you must look in the mirror and identify what type of culture you have. University of Michigan professors Robert Quinn and Kim Cameron have developed the Organizational Culture Assessment Instrument, which defines four common types:

1. Clan. These are generally friendly environments where employees feel like family. Clan cultures emphasize teamwork, participation and consensus. Such companies often have a horizontal structure with few barriers between staff and leaders, who act as mentors. As a result, employees tend to be highly engaged and loyal. Success involves addressing client needs while caring for staff. Clan culture frequently is seen in start-ups and small companies with employees who have been there from the beginning.

2. Adhocracy. Adhocracies are dynamic, entrepreneurial and creative places where employees are encouraged to take risks, and founders are often seen as innovators. They’re committed to experimentation and encourage individual initiative and freedom — with the long-term goal of growing and acquiring new resources. Success, therefore, is defined by the availability of new products or services. Think Facebook and similar technology companies that anticipate needs and establish new standards.

3. Market. These cultures are results-driven and competitive, with an emphasis on achieving measurable goals and targets. They value reputation and success foremost. Employees are goal-oriented while leaders tend to be hard drivers, producers and rivals simultaneously. Market share and penetration are the hallmarks of success, and competitive pricing and industry domination are important. Examples include Amazon and Apple.

4. Hierarchy. Hierarchical businesses have formal, structured work environments where processes and procedures dictate what employees do. Smooth functioning is critical. Companies strive for stability and efficient execution of tasks, as well as low costs. Leaders seek to achieve maximum efficiency and consistency in their respective departments. Hierarchical culture is common in government agencies and old-school businesses such as the Ford Motor Company.

Bear in mind that most companies exhibit a mixture of the four styles, with one type dominant. If you fear your culture is inhibiting you from achieving strategic objectives, there’s good news — cultures can evolve.

Although making widespread changes won’t be easy, no business should accept a culture that’s hindering productivity or possibly even creating liability risks. We can assist you in assessing your operations and profitability to help you gain insights into the impact of your company culture.

© 2019

Fitbit shares rise as filing reveals bidding war between Google and mystery firm

Fitbit’s stock was up more than 3.7% Tuesday morning after an SEC filing revealed a bidding war between Google and a mystery firm for the fitness wearable maker. Google announced its intentions to acquire Fitbit on Nov. 1 for about $2.1 billion in cash.

CNBC learned later on Tuesday that the mystery firm was Facebook.

The filing says that several firms met with Fitbit to discuss an acquisition but that, ultimately, only Google and another company offered serious bids. It’s unclear who the other firm was, but Amazon has been aggressively exploring the health-tracking wearables space and UnitedHealthcare and Fitbit had an existing wellness partnership program called Motion.

Discussions with a so-called “Party A” began on June 11, according to the filing, when the CEO of that company and Fitbit CEO James Park had dinner “and discussed generally the wearables technology landscape.” Later on August 20, Fitbit’s senior management also provided “an overview of Fitbit’s business to members of Google’s management.”

On Oct. 2, Google “submitted a written non-binding indication of interest to acquire Fitbit for $4.59 per share,” a proposal that was denied by Fitbit’s board, which asked for $6.00 per share.

On Oct. 11, Google came back with $5.05 a share.

A day later, on Oct. 12, the mystery firm “Party A” bumped the bid up to $5.90, according to the filing. Google, on the same day, offered $6.50 per share.

″Later that same afternoon, representatives of Qatalyst Partners informed Party A that Fitbit had received an acquisition proposal with a price that was meaningfully higher than Party A’s proposed price of $5.90 per share, and that Party A would need to significantly increase its offer within the next few hours as our Board would be meeting to discuss the status of the parties’ proposals,” the filing said.

The bidding increased rapidly that evening.

Fitbit’s board asked its bank on the deal, Qatalyst Partners, to get final offers from both companies. Google offered $7.05 a share but, as Fitbit was working on an exclusivity agreement with Google, the CEO of Party A offered a verbal agreement to acquire Fitbit for $7.30 a share, its best and final offer.

On Oct. 13, Google submitted its final offer to acquire Fitbit at a price of $7.35 a share. “The revised proposal was conditioned on Fitbit immediately entering into the exclusivity agreement,” the filing said.

The deal was announced on Nov. 1 when Google parent Alphabet announced it would acquire Fitbit for the agreed-upon deal of $7.35 a share, or about $2.1 billion in cash. But, had there not been a second firm bidding, the deal could have fallen apart, or Google could have agreed to pay far less.

Oil hovers around $64 as trade hopes offset US inventories

Oil hovered around $64 a barrel on Wednesday as an industry report showing a surprise boost in U.S. crude inventories was offset by optimism about a U.S.-China trade deal being agreed soon.

Oil industry group the American Petroleum Institute on Tuesday said U.S. crude inventories rose by 3.6 million barrels, compared with analysts’ expectations for a decrease. The U.S. government’s supply report is due later on Wednesday.

Brent crude futures fell 6 cents to trade at $64.21 a barrel, while U.S. West Texas Intermediate crude fell 11 cents to $58.30 a barrel.

Oil had risen for the last two days on expectations that China and the United States, the world’s two biggest crude oil users, would soon sign a preliminary agreement beginning an end to their 16-month trade dispute.

“Trade deal optimism persists,” said Tamas Varga of oil broker PVM. “The belief in a positive trade deal continues unabated.”

That was fueled by comments from President Donald Trump, who said on Tuesday the United States and China are close to agreement after top negotiators spoke by telephone and agreed to keep Oil hovered around $64 a barrel on Wednesday as an industry report showing a surprise boost in U.S. crude inventories was offset by optimism about a U.S.-China trade deal being agreed soon.

Oil industry group the American Petroleum Institute on Tuesday said U.S. crude inventories rose by 3.6 million barrels, compared with analysts’ expectations for a decrease. The U.S. government’s supply report is due later on Wednesday.

Brent crude futures fell 6 cents to trade at $64.21 a barrel, while U.S. West Texas Intermediate crude fell 11 cents to $58.30 a barrel.

Oil had risen for the last two days on expectations that China and the United States, the world’s two biggest crude oil users, would soon sign a preliminary agreement beginning an end to their 16-month trade dispute.

“Trade deal optimism persists,” said Tamas Varga of oil broker PVM. “The belief in a positive trade deal continues unabated.”

That was fueled by comments from President Donal working on remaining issues.

Attention will focus later on Wednesday on the U.S. government’s weekly oil supply report from the Energy Information Administration, due at 1530 GMT.

“If the numbers are similar to the API, this would be the fifth straight week of stock builds, and would not be the most constructive reading for WTI as we head into the Thanksgiving holiday,” ING analyst Warren Patterson said in a note.

Expectations that the Organization of the Petroleum Exporting Countries and allies such as Russia will maintain their deal to restrain supply are also supporting prices.

The producers, known as OPEC+, hold their next oil policy review meetings on Dec. 5-6 in Vienna. They are expected to extend their supply cut agreement further into 2020.

Tesla has received 250,000 pre-orders for its Cybertruck

Tesla CEO Elon Musk suggested late Tuesday that his company had now received 250,000 pre-orders for the Cybertruck, its “Blade Runner”-inspired electric pickup.

The billionaire tweeted “250k,” indicating — based on his previous Twitter posts — that this was the number of “orders” the firm had collected from prospective customers to date.

Just a few days ago, Musk was boasting Tesla had received 200,000 orders for the truck. The company first unveiled the new product at a promotional event in Los Angeles last week.

However, what Musk meant by orders and what most people would think he means are two different things. Tesla is only taking pre-orders for the Cybertruck at the moment, which cost $100 a pop to apply for. According to the company, these pre-orders aren’t actually considered as deposits for the vehicle, which comes with a starting price of $39,900.

The Tesla chief has gotten into hot water over his use of Twitter in the past. The U.S. Securities and Exchange Commission (SEC) fined both Musk and his electric vehicle firm $20 million each last year over Musk’s now infamous tweet claiming he was considering taking Tesla private for $420 a share: “Funding secured.”

The case was reignited earlier this year after he again made a tweet in relation to his business. After claiming Tesla would “make around 500k” cars in 2019 — only to later clarify he meant an “annualized product rate” of around 500,000 vehicles — the SEC resurrected the legal dispute. Musk reached a deal with the SEC earlier this year to settle the spat.

Another controversial tweet posted by the tech entrepreneur was about a British diver involved in the effort to rescue a Thai boys soccer team trapped in a cave last year. Musk referred to the spelunker, Vernon Unsworth, as a “pedo guy,” and is now facing a defamation lawsuit over the incident.

Botched debut

Tesla’s unveil event for its first pickup truck was marred by the vehicle’s windows breaking when an executive tossed a metal ball at them. The car’s trapezoid shape was also mocked in various memes. Still, others have praised the Cybertruck for bringing something new to the table in automotive design.

Meanwhile, Musk also teased Ford with the new vehicle, sharing a video of the truck dragging a screeching Ford F-150 up a hill in a tug-of-war battle. Ford X Vice President Sundeep Madra subsequently responded calling for an “apples to apples” tug-of-war test of the two cars, to which Musk replied: “Bring it on.”

But the contest is unlikely to happen. A Ford spokesperson subsequently said that Madra’s tweet was only “tongue-in-cheek” and “nothing more.”

Tesla’s all-electric Cybertruck comes in three versions: a single-motor variant that should give drivers 250 miles of range, a dual-motor model with 300 miles of range and a tri-motor edition with 500 miles of range. The models are priced at between $39,900 on the low end and $69,900 at the top of the range.

Uber stripped of its London license as regulator says it put passengers at risk

LONDON — Uber was stripped of its license to operate in London on Monday by the city’s transport regulator, which cited a “pattern of failures” that put passengers at risk.

The San Francisco-based company immediately said that it plans to appeal Transport for London’s decision, labeling the move “extraordinary and wrong.” Shares of Uber fell over 1% after the ruling.

Because of the appeal, nothing will change for passengers and drivers who the use the Uber app for the time being. But the ban represents a huge blow to the ride-sharing firm, which has worked to improve its reputation as a friend rather than foe to regulators under current CEO Dara Khosrowshahi.

TfL had previously suspended Uber’s license in 2017, flagging concerns with the company’s approach to safety. Following that initial decision, Uber was twice granted a temporary license to continue operating in the city — the first, a 15-month reprieve issued by a judge last year, and the second, a two-month permit granted by TfL in September.

“Uber has made a number of positive changes and improvements to its culture, leadership and systems in the period since the Chief Magistrate granted it a licence in June 2018,” TfL said. “This includes interacting with TfL in a transparent and productive manner.”

“However, TfL has identified a pattern of failures by the company including several breaches that placed passengers and their safety at risk,” the regulator continued. “Despite addressing some of these issues, TfL does not have confidence that similar issues will not reoccur in the future, which has led it to conclude that the company is not fit and proper at this time.”

Uber has 21 days to appeal the decision.

“TfL’s decision not to renew Uber’s licence in London is extraordinary and wrong, and we will appeal,” Jamie Heywood, Uber’s regional general manager for Northern and Eastern Europe, said in a statement. “We have fundamentally changed our business over the last two years and are setting the standard on safety. TfL found us to be a fit and proper operator just two months ago, and we continue to go above and beyond.”

“On behalf of the 3.5 million riders and 45,000 licensed drivers who depend on Uber in London, we will continue to operate as normal and will do everything we can to work with TfL to resolve this situation.”

London is Uber’s biggest European market and a key driver of its revenues beyond the U.S. It has faced increased competition in the U.K. capital from the likes of Estonian start-up Bolt and French rival Kapten.

In its announcement, London’s transport authority said it took issue with a change made to Uber’s identification systems that allowed unauthorized drivers to upload their photos to other Uber driver accounts. According to TfL, this allowed them to pick up riders as though they were the booked driver in at least 14,000 trips.

“This means all the journeys were uninsured and some passenger journeys took place with unlicensed drivers, one of which had previously had their licence revoked by TfL,” the regulator said.

The watchdog also claimed that dismissed or suspended Uber drivers were able to create an account and carry passengers, and added “several insurance-related issues” led the regulator to prosecute the company earlier this year.

“Over the last two months we have audited every driver in London and further strengthened our processes,” Uber said of TfL’s claims about unauthorized drivers being able to operate on its platform. “We have robust systems and checks in place to confirm the identity of drivers and will soon be introducing a new facial matching process, which we believe is a first in London taxi and private hire.”

Ahead of Monday’s announcement, Uber had made a number of safety updates to its app in an apparent attempt to allay regulatory concerns. One tool it added was a button that users could press to flag discrimination experienced on a trip, while another would send out push notifications in the event that GPS data indicates a car crash may have taken place.

‘Hammer blow’

London Mayor Sadiq Khan issued a statement in support of TfL’s decision: “Keeping Londoners safe is my absolute number-one priority, and TfL have identified a pattern of failure by Uber that has directly put passengers’ safety at risk.”

He added: “There is undoubtedly a place for innovative companies in London — in fact we are home to some of the best in the world. But it is essential that companies play by the rules to keep their customers safe.”

But labor union IWGB slammed the move, calling it a “hammer blow” to Uber’s 45,000 drivers in the city. “We are asking for an urgent meeting with the mayor to discuss what mitigation plan can now be put in place to protect Uber drivers,” said James Farrar, chair of the union’s private hire drivers branch.

In a tweet Monday, Khosrowshahi hit back at the regulator’s decision.

“We understand we’re held to a high bar, as we should be,” he said. “But this TfL decision is just wrong. Over the last 2 years we have fundamentally changed how we operate in London. We have come very far — and we will keep going, for the millions of drivers and riders who rely on us.”

Xerox says it will take HP buyout offer hostile by going directly to shareholders

Xerox CEO John Visentin sent a letter to HP on Tuesday announcing plans to take its $33.5 billion buyout directly to shareholders.

“While you may not appreciate our ‘aggressive’ tactics, we will not apologize for them,” Visentin wrote in the letter. “The most efficient way to prove out the scope of this opportunity with certainty is through mutual due diligence, which you continue to refuse, and we are obligated to require.”

“We plan to engage directly with HP shareholders to solicit their support in urging the HP Board to do the right thing and pursue this compelling opportunity,” he added.

Activist investor Carl Icahn, who owns a 10.6% stake in Xerox and recently bought a $1.2 billion stake in HP, has pushed for a merger.

The two companies have been sparring ever since HP’s board of directors unanimously rejected a proposal from Xerox to acquire the company for $22 per share in cash and stock. HP said the offer is not in the best interest of shareholders and would undervalue HP. Xerox execs initially gave HP’s board a deadline of Nov. 25 to reconsider the offer.

HP announced in October plans to cut between 7,000 and 9,000 jobs by the end of fiscal 2022 as part of a broader restructuring plan that it estimates will save $1 billion a year. The cuts would amount to nearly 16% of its 55,000 employees across the world, according to data from FactSet.

“The potential benefits of a combination between HP and Xerox are self-evident,” Visentin wrote. “Together, we could create an industry leader — with enhanced scale and best-in-class offerings across a complete product portfolio — that will be positioned to invest more in innovation and generate greater returns for shareholders.”

Spokespeople for HP and Xerox were not immediately available to comment on the letter. HP reports its fourth-quarter earnings on Tuesday after the bell, when it may issue a response.

Read Xerox CEO John Visentin’s full letter below.

Dear Chip and Enrique,

Your refusal to engage in mutual due diligence with Xerox defies logic.

We have put forth a compelling proposal – one that would allow HP shareholders to both realize immediate cash value and enjoy equal participation in the substantial upside expected to result from a combination. Our offer is neither “highly conditional” nor “uncertain” as you claim. It does not contain a financing contingency, and the combined company is expected to have an investment grade credit rating.

The potential benefits of a combination between HP and Xerox are self-evident. Together, we could create an industry leader – with enhanced scale and best-in-class offerings across a complete product portfolio – that will be positioned to invest more in innovation and generate greater returns for shareholders.

The market clearly understands the industrial logic of this transaction. HP and Xerox shares are up 9.5% and 6.6%, respectively, since the date our proposal was first made public. We have already received inquiries from several HP shareholders and are encouraged by their interest in our offer.

Nevertheless, rather than engage with us in three weeks of customary mutual due diligence, HP continues to obfuscate and make misleading statements. It is important that we correct, for your benefit and that of HP’s shareholders, a few of the mischaracterizations from your last letter.

• On February 5, 2019, Xerox announced a three-year strategic plan that was built on four initiatives: (i) optimizing operations, (ii) driving revenue, (iii) reenergizing innovation and (iv) focusing on cash flow and capital returns. We are already outperforming this plan. Through the first nine months of 2019, we have increased our guidance for adjusted earnings per share and free cash flow while also increasing investments in innovation and our core business, which is why our stock is up 96% year-to-date.
• Your comment regarding total contract value is little more than a diversion. Your own public disclosure states that backlog information is “not a meaningful indicator of future business prospects” or “material to an understanding of our overall business.”
• It is possible that the modest, expensive and time-consuming cost savings included in the restructuring plan you announced on October 3, 2019 (only $1 billion over three years at a cost of $1 billion in restructuring charges), has resulted in a lack of confidence in HP’s ability to realize the $2+ billion of synergies your team previously agreed could be achieved in a combination.
• We monetized our illiquid interest in Fuji Xerox at over 20 times 2019 expected aggregate cash flow while favorably restructuring the terms of our sourcing relationship with Fuji Xerox to ensure continuity of supply, protect our high-value intellectual property and provide strategic flexibility. There is no “hole in Xerox’s portfolio” as a result of those transactions – just significantly more cash to support growth and greater flexibility in our sourcing terms.

While you may not appreciate our “aggressive” tactics, we will not apologize for them. The most efficient way to prove out the scope of this opportunity with certainty is through mutual due diligence, which you continue to refuse, and we are obligated to require.

We plan to engage directly with HP shareholders to solicit their support in urging the HP Board to do the right thing and pursue this compelling opportunity.

Sincerely,

John

Vice Chairman and CEO
Xerox Holdings Corporation

Oil traders bet on economic upswing in 2020

LONDON (Reuters) - (John Kemp is a Reuters market analyst. The views expressed are his own)

Crude oil traders are betting the market will tighten significantly next year, even as the major statistical agencies predict production will outstrip consumption and oil inventories will rise.

Most of the divergence can be explained by differing assumptions about global growth in 2020.

The International Energy Agency (IEA), the U.S. Energy Information Administration (EIA) and the Organization of the Petroleum Exporting Countries are all projecting that the oil market will be in surplus in 2020.

Each of the three agencies is forecasting that non-OPEC oil supplies will increase around 1 million barrels per day (bpd) faster than global oil consumption next year.

The three agencies are also forecasting non-OPEC production growth of 2.2-2.4 million bpd while consumption increases by only 1.1-1.4 million bpd (tmsnrt.rs/2QO6h45).

If these forecasts are correct, the result will be a significant rise in stocks of crude and refined products, unless OPEC members and their allies reduce their own output even further.

But the shape of the crude futures curve suggests traders and hedge funds are instead anticipating a drawdown in stockpiles next year.

Brent’s six-month calendar spread has tightened to a backwardation of around $3.50 per barrel, up from less than $1.90 at the same a month ago and a contango of $1.10 this time last year.

If the prospect of a cyclical recovery encourages more fund managers to establish bullish long positions in the next few months, however, it will accelerate the shift into backwardation.

Portfolio managers tend to invest in futures contracts near to maturity since they offer the greatest volatility and liquidity: position-building therefore tends to lift spot prices AND increase the degree of backwardation.

If the hedge fund community becomes more convinced the economy and oil consumption growth will accelerate in 2020, position building will cause the backwardation to become even steeper.

Backwardation (where spot prices trade above futures prices) is normally associated with low/falling inventories, while contango (spot prices trading below futures) is typically associated with high/rising stockpiles.

The six-month calendar spread is now in the 91st percentile for all trading days since the start of 1990, implying that traders anticipate production will fall significantly below consumption over the next six months.

SPREAD WATCHING

Brent futures have been progressively shifting toward backwardation since early 2015 as the crude market has gradually recovered from the slump of 2014/15.

But the current degree of backwardation is unusual: previous backwardations of similar magnitude have recently been temporary and associated with sudden disruptions in oil supplies.

Big backwardations have been caused by the attacks on Saudi Arabia’s oil installations in 2019 or the repeated tightening of U.S. sanctions on Venezuela and Iran in 2018.

The current backwardation, however, is not associated with any sudden loss of oil supplies. Instead it reflects the combination of steadily tightening supplies and expectations for faster demand growth in 2020.

U.S. sanctions continue to limit exports from Iran and Venezuela. Lower prices are expected to slow growth from U.S. shale. And the OPEC+ group of exporters is likely to extend current production restraints well into next year.

At the same time, investors and commodity traders are growing more hopeful the global economy will avoid a recession in 2020, which would support faster growth in oil consumption over the next 12-18 months.

Recent financial market and industrial data suggests the current cyclical downswing in the global economy may have past its worst point (“Global economy dodges recession by the narrowest of margins”, Reuters, Nov. 19).

If that proves correct, there is potential for a cyclical upswing in 2020/21, similar to the recovery in 1999/2000, after a similar mid-cycle slowdown in 1997/98 (“Oil and equities prepare to party like its 1999”, Reuters, March 19).

TREND REVERSION

In the last two decades, oil consumption has grown on average by around 1.5% per year – which at the moment is equivalent to an additional 1.5 million bpd per year.

If oil consumption growth returns to its long-term trend rate next year, consumption could rise by an extra 150,000 to 300,000 bpd compared with the current major-agency forecasts.

And if consumption rebounds more strongly like 1999, when it rose by 2.1%, oil use could increase by an extra 700,000 to 1 million bpd compared with the major forecasts.

A cyclical recovery in oil consumption could therefore absorb much of the predicted growth in non-OPEC production next year.

The resolution of U.S./China trade tensions, or at least a temporary truce, and the resulting impact on global growth, is therefore critical for the oil market balance and prices in 2020.

GLOBAL GROWTH

At the moment, most major economic forecasters, including the International Monetary Fund (IMF) and the Organisation for Economic Cooperation and Development (OECD) and see global growth staying subdued in 2020.

But if the U.S./China trade dispute can be resolved, and if the global expansion re-accelerates, there is the potential for faster growth in both economic activity and oil consumption.

Following the IMF/OECD, the major oil statistical agencies are predicting only a modest acceleration in global economic growth next year, implying the oil market will be oversupplied.

By contrast, oil traders are increasingly betting on a faster economic acceleration, eliminating the predicted oil surplus and even pushing the market into deficit.

Facebook and Twitter say hundreds of users accidentally gave improper access to personal data through third-party apps

Facebook and Twitter on Monday announced that personal data of hundreds of users may have been improperly accessed after they used their accounts to log into certain Android apps downloaded from the Google Play store.

The companies received a report from security researchers who discovered that a software development kit named One Audience gave third-party developers access to personal data. This includes the email addresses, usernames and most recent tweets of people who used their Twitter accounts to access apps including Giant Square and Photofy.

The company also said that it may have been possible for a person to take control of someone else’s Twitter account through this vulnerability, though there is no evidence that this occurred.

“We think it’s important for people to be aware that this exists out there and that they review the apps that they use to connect to their accounts,” said Lindsay McCallum, a Twitter spokeswoman.

Twitter said it will be informing users who were affected. The company said it has also informed Google and Apple about the vulnerability so that they can take further action.

The warning comes as Facebook, Google and Twitter are all facing heightened scrutiny from regulators, lawmakers and users for the ways that personal data is used by outside developers to track and target consumers. The issue has been of particular concern since March 2018, when reports surfaced that analytics firm Cambridge Analytica improperly accessed up to 87 million Facebook profiles, in part to target ads for Donald Trump in the 2016 presidential election. Facebook later suspended tens of thousands of apps after investigating its ecosystem.

A Facebook spokesperson sent the following statement regarding Monday’s disclosure:

“Security researchers recently notified us about two bad actors, One Audience and Mobiburn, who were paying developers to use malicious software developer kits (SDKs) in a number of apps available in popular app stores. After investigating, we removed the apps from our platform for violating our platform policies and issued cease and desist letters against One Audience and Mobiburn. We plan to notify people whose information we believe was likely shared after they had granted these apps permission to access their profile information like name, email and gender. We encourage people to be cautious when choosing which third-party apps are granted access to their social media accounts.”

Elon Musk says Tesla has received 200,000 orders for its Cybertruck

Hours earlier, Musk tweeted that Tesla had received 187,000 “orders.” A prospective Cybertruck owner must pay Tesla a refundable, $100 “preorder fee.” In his boastful tweet on Saturday, Musk conflated orders with preorders, which are distinct from a final commitments to purchase the Cybertruck.

On Saturday, the CEO wrote: “146k Cybertruck orders so far, with 42% choosing dual, 41% tri & 17% single motor.”

According to the Cybertruck Motor Vehicle Pre-Order Agreement on Tesla’s website on Saturday, this fee is fully refundable. But to actually purchase the Bladerunner-inspired Tesla Cybertruck, customers also have to take other steps:

“After you submit your completed pre-order and the options you selected become available in production, we will invite you to complete the configuration of your Vehicle. We will then issue you the Vehicle Configuration and Final Price Sheet based on the base price of the model and any options included or that you select.”

It’s less costly to preorder a Cybertruck than it has been to order previous electric vehicles unveiled by Tesla.

For example, to preorder one of Tesla’s forthcoming crossover SUVs, the Model Y, customers had to lay down a heftier $2,500 deposit. In 2016, Tesla took preorders for the Model 3 at $1,000 a pop.

On its most recent earnings call, Musk said: “I’ve actually recently driven the Model Y release candidate and think it’s going to be an amazing product and be very well received. I think it’s quite likely to — just my opinion, but I think it will outsell Model S, Model X and Model 3 combined.”

However, Tesla and Musk have not revealed how many preorders they have received for the Model Y.

During the second quarter of 2018, Tesla said in a shareholder update that Model 3 preorders had surpassed 450,000. But the company never disclosed a precise number or said what percent of reservations ultimately converted to new Model 3 sales for Tesla.

No matter the take rate, preorders for the Cybertruck are one indication that Tesla’s marketing game remains strong as ever. Tesla unveiled its Cybertruck design and specifications at a promotional event in Los Angeles on Thursday. The vehicle looks like a big metallic trapezoid and has a starting price of $39,900.

At the unveiling, Musk tried to showcase the Cybertruck’s durability by having the company’s design chief hurl a metal ball at one of the Cybertruck’s armored glass windows. The window ended up cracking. Then another ball was thrown at another window and it shattered, too.

“We threw wrenches, we threw everything even literally the kitchen sink at the glass and it didn’t break. For some weird reason, it broke now,” a humorous Musk said at the event. “I don’t know why. We will fix it in post.” The stunt helped make the Cybertruck the subject of memes and media coverage around the world.

Some Wall Street analysts were critical of the truck’s extreme style, while others speculated that the design could be a primary selling point for Tesla.

Tesla shares fell 6.1% in Friday trading to close at $333.04.

The shattering of the truck’s unbreakable glass windows during the live demonstration was not a good start,” Deutsche Bank said in a note.

The Cybertruck is Tesla’s sixth electric vehicle model since the company was founded in 2003. It was seen as a potential competitor to best selling pickups like the Ford F Series and General Motor’s Chevrolet Silverado, before its debut.

However, after the edgy design was revealed, some analysts said that they view Tesla’s truck as more of a niche product.

“Tesla tried to throw a lot of stones at the legacy pickups on the market, with Tesla highlighting advantages in durability, towing, payload, and 0-60,” Credit Suisse wrote in a note. “Yet we think the legacy OEMs can breathe a sigh of relief, as we don’t expect Cybertruck to encroach on large pickup share.”