February 19, 2019

“SAY” for Retail Shareholders: Shades of the Defunct “Moxy Vote”

This CNBC article describes how Tesla recently used a new plaform – called “Say” – for retail shareholders to ask questions during an earnings call. It reminds me of “Moxy Vote,” which went belly up in 2012. Here’s a 2011 podcast that I taped with Moxy Vote’s CEO.

Here’s the intro from the CNBC article (also see this blog from Jim McRitchie for an overall look at this market):

Tesla Chief Executive Office Elon Musk speaks at his company’s factory in Fremont, California. Tesla opened its fourth quarter conference call on Wednesday by fielding questions submitted through a mobile app by some of its mom and pop investors. It’s was a far less contentious call than the one last May, when CEO Elon Musk sparred with professional Wall Street analysts over their questions about Tesla’s production issues and cash burn rate. Musk lashed out at one analyst who asked about Tesla’s capital requirements, saying “Boring, bonehead questions are not cool.” He later apologized.

Earnings conference calls normally feature a polite repartee between company executives and research analysts and are seldom open to questions from news reporters (CNBC’s Phil LeBeau did slip in a question during the October call) much less ordinary investors. But Musk’s conference calls in recent quarters have been a little higher-octane. The call in May featured a surprising guest in the form of a 20-something YouTuber and small Tesla shareholder named Galileo Russell, who was allowed to pepper Musk with questions.

Russell, whose YouTube channel is a grass roots forum for Tesla shareholders, teamed up with a tech startup called Say that is backed by hedge fund manager Steve Cohen’s private Point72 Ventures. Say is a mobile app that aims to give individual shareholders more power in voting on company issues and communicating with companies as shareholders.

Say was the app gathering the questions submitted to Musk on Wednesday. Musk and other executives on the call ended up answering four of them, including one about how a recession could affect demand (Musk said he still sees orders of 500,000 for Model 3 in a recession environment), the time-line for self-driving features (Musk said they’re working on traffic light technology and navigating complex parking lots), batteries (wouldn’t comment on product development), and Tesla semi and Model Y (Musk says they might unveil the Tesla pickup truck this summer).

Musk has had to shore up his shareholder relations after sending everyone into a frenzy last year by casually tweeting that he was considering taking Tesla private. He paid $20 million to settle with the SEC over that tweet. The questions submitted for Wednesday’s call represented a tiny sliver of Tesla’s 171 million shares outstanding. Musk didn’t directly answer one about reputation issues. But on the Say app, where people were voting on which questions they wanted asked, it was the most popular one going into Wednesday’s call.

So How Does “SAY” Work?

According to this set of FAQs on SAY’s site, shareholders get verified by linking their brokerage account and confirming they own company stock. Then, they can submit as many as 3 questions. Shareholders can also “vote” in support of questions raised by other shareholders on the SAY platform. SAY’s site displays how many votes each question receives – as well as the total number of shares that those votes represent.

During Tesla’s earnings call, hundreds of questions were submitted via the SAY platform – here’s Tesla’s CEO answering some of those questions on Twitter

Today’s Webcast: “Audit Committees in Action – The Latest Developments”

Tune in today for the webcast — “Audit Committees in Action: The Latest Developments” — to hear Deloitte’s Consuelo Hitchcock, EY’s Josh Jones and Gibson Dunn’s Mike Scanlon catch us up on a host of new SEC, FASB & PCAOB developments that impact how audit committees operate — and more.

Broc Romanek