Governance by poll on Twitter is such a stupid idea that it remains hard to believe that Elon Musk was sincere when he invited the site’s users to determine whether he should continue as CEO. One suspects he’s already decided to hire an executive to run the business — which, mind you, he told a Delaware court he would do a few weeks ago. The survey just caused a stir.
In the unlikely event that consumers voted to keep him as boss, Musk could give roughly the same answer as he is giving now. In short, he will remain in charge for a while because a CEO cannot be appointed overnight.
The bigger question is how much real power Twitter’s new CEO will have. Probably not much. Musk will continue to own Twitter and be free to interfere. Even as he confirmed he would be stepping down, he said he intended to be in charge of the software side. The vacancy sounds more like a COO position. Opportunities to challenge Musk, even on minor policies, will always be limited.
Therefore, the result looks extremely confusing from the perspective of Tesla shareholders, who would prefer a clean ending. Tesla’s stock price was $333 in April when the $44 billion takeover bid was launched; it was $230 when the deal closed in late October; and now it’s $137. Yes, the broader technology sector was weak throughout the period; and, yes, higher interest rates are a factor, as Musk likes to claim. But his sales of shares in the electric car company (worth nearly $40 billion as of late last year), his absence from day-to-day duties and a general blurring of lines apparently contributed to the decline.
Musk’s stake in Tesla is only 13%, so under other circumstances the board and shareholders would have some leverage to tell him to concentrate on the day-to-day work. However, this is clearly not going to happen. While Musk describes Twitter as a plane headed for an emergency landing, he’ll be hands-on regardless of his job title. This saga will go on and on, and Tesla shareholders better get used to the fact.
Qualifying for an F for failure in accounting
A partner in a leading UK accountancy firm can expect to earn close to £1m a year, so perhaps we shouldn’t be surprised that staff might cheat on the professional exams that are a lottery entry requirement.
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However, it is shocking that supposedly top-notch partnerships cannot be relied upon to get their houses to run an honest examination system, which should not be the hardest task in the world given the financial resources at their disposal.
The Financial Reporting Council, the accounting watchdog, did not detail how widespread the fraud was in the UK. It did not uncover “systemic” problems, he said; on the other hand, it has “live” issues and its rating is “current”, which sounds bad enough. Indeed, US regulators have already fined KPMG’s UK arm.
The bigger failure of professional firms is clearly the shocking number of audit scandals in recent years. But there is a connection: if the exams are seen as open to abuse, the rot will spread.
Still too little light on the bulb transfer
The government is finally lifting the curtain – a little – on the transfer of failed energy supplier Bulb to Octopus. With the deal completed, the business unit said Octopus would receive a finance facility of up to £4.5bn to cover the cost of buying energy for Bulb customers until the end of next March.
Actual facility utilization should be lower as wholesale energy prices have fallen recently (even if the outlook for early 2023 doesn’t look so good). So even when we count the £1.1 billion bill for taxpayers to own the Bulb for 12 months, we shouldn’t be on the hook for the £6.5 billion quoted by the Office for Budget Responsibility; his figure now seems a theoretical but not very likely accounting high.
What we don’t have, however, is the disclosure of what Octopus is paying for Bulb’s business (estimates of £100m-£200m have never been confirmed) or the terms of the loan being made. In the circle, the level of transparency surrounding this deal remains appalling.
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