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Tesla should adopt Enron's old catchcry and "Ask "Why"?

· Automotive,Reputation Risk,Reputation,Responsible Investme

When Elon Musk posted his April Fool's/Easter joke re a Tesla Bankruptcy, it appears no one was laughing.

Musk April Fool's Tweet on Tesla Bankruptcy

CB Insights reports that the Company has lost $8B of its market cap in the last week. Just check out the 3 month stock chart.

Tesla stock price drops by $8B

The company also lost circa $2B last year, as Tesla's income statement below highlights.

6 very loud alarm bells were also going off at Tesla for any responsible investor.

Tesla income statement shows circa $2B loss

Oh dear. Who knew our darling Tesla would ever be cited as having "Enron-esque" characteristics.

You may recall Enron - the darling of America's energy industry that during its heights had a market cap that exceeded $60 billion. It left behind a human cost that still has shocks today - 29,000 people lost their jobs and medical insurance. The employee who worked an honest life’s work on an average wage, having invested their life’s pension in the company, walked away with only $4,500 in severance and saw their 300K pension fund transformed into only $1,200. Investors lost 1.2B in pension funds and retirees lost just over $2B... Many people took their own lives and the financial impact destroyed families. The 85,000 strong Audit Firm Arthur Anderson imploded... all while Enron's top executives paid themselves $55M in bonuses.

Unfortunately, 3 characteristics were synonymous with Enron

  1. Aggressive accounting practices and use of loopholes
  2. Misalignment of Executive incentives with the company's sustainability, and
  3. Cultural risks of conflicts of interest and lowered standards of corporate governance.

Instead of being inspired by Trump's tweet tactics and raising its investors concerns, perhaps its time for Musk to consider his LEADS* in both their corporate decision making and his corporate communications.

  1. Is it Legal? (Both locally & internationally),
  2. Is it Ethical (Is it regarded as unethical behavior by stakeholders even if legal?),
  3. Is it Acceptable (Is it criticized by some, but regarded as acceptable by most who matter most),
  4. Is it Defensible (Could we defend our action if this became front page news?) and
  5. Is it Sensible - Even if it failed all or some of the EAD criteria - does it still make good business sense?”

Alas, for Musk, this April Fools, investors and Tesla's stakeholders were in no laughing mood.

 
It's time to adopt Enron's old catchcry, and "Ask "why?".
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