Glacier Think Bank Researcher | Off the feather
Recently, Faraday Future (hereinafter referred to as FF), founded by Jia Yueting, announced that the special committee of independent directors of its company has completed an investigation into the previous inaccurate allegations of J Capital Research.
Previously, J Capital Research, a U.S. short-selling agency, released a report calling FF an "emerging electric vehicle scam" that would never sell a car. Subsequently, the FF Independent Directors Special Committee reviewed the group's business, and the investigation found that FF had previously announced that it had more than 14,000 orders for FF 91, but only 300 vehicles had been paid.
On February 9, the relevant person in charge of FF said in an interview with the media: "The reservation form released by the company contains two types of paid booking orders and free booking orders, of which the company collects more than 14,000 FF 91 bookings, with the information of all booking users, this part is free booking data; and the company announced the global 300 invitation system limited edition FF 91, this part is a paid booking form." ”
This statement of the person in charge is tantamount to "self-exposure": FF 91 really paid the deposit of only 300 appointments!
In response to the results of this survey, the organizational structure of FF has also been greatly adjusted. Independent Director Susan Swenson will assume the newly created position of Executive Chairman. In the future, FF CEO Carsten Breitfield and founder and chief product officer Jia Yueting will report directly to the new executive chairman, and both will have their annual base salary cut by 25%.
Jia Yueting's Spring Festival was very bad
A year ago, FF announced its own IPO plans, raising up to $1 billion, all of which are said to be used for mass production of FF91. In the prospectus, FF said that its first flagship model, the FF91, has received orders for more than 14,000 units and expects to sell more than 400,000 units over the next five years.
People exclaimed, Xiao Jia was resurrected with blood, creating a miracle.
A year later, the fraud was exposed by internal investigations, the actual performance was dismal, Jia Yueting was demoted and paid, and Xiao Jia, who was resurrected with blood, was beaten back to his original form, leaving him little time.
In China's capital market, the enchanting little Jia, who played in the wind and water and turned upside down, did not make much waves in the United States, but was overturned by the independent director supervision mechanism.
Photo/Visual China
Independent directors, Chinese shareholders are familiar with, the 10,000-year-old vase of signing endorsements, the tool people who come out to stand up and speak out when the major shareholders are fighting - this is still a relatively rare phenomenon, probably one hand can be counted. As for the supervisory role of safeguarding the interests of minority shareholders and standardizing the business behavior of enterprises, it only exists in the system design on paper.
However, Xiao Jia, who can uproot the leeks and can make the wool of the Xu family seal, is planted in the hands of such a vase character, which is really unexpected.
Could it be that this American independent director is particularly powerful? That's not true, the heroic drama of Wall Street's "brave slaying the dragon" is the interpretation of Hollywood screenwriters. The capital circle is bustling with profit-seekers, who are in the mood to play the role of dragon slayer warriors. The transformation of the vase into a star is caused by the rules of the game and has to be taken.
Because, the big devil in the market has his eye on FF.
Who "bullied" Xiao Jia
This big devil is a short-selling agency.
If independent directors are said to be a loveless, hateless, and senseless transparent in the eyes of Chinese shareholders, then the legendary short-selling institution can be called the legendary big devil.
In fact, in the United States, short-selling institutions are not very popular with retail investors. At the beginning of last year, there was a world-renowned tragedy of "Bloodbathed Wall Street by American retail investors", and the trigger was the total outbreak of "foreign leeks" against bearish institutions for many years.
Photo/Weibo
The heart-to-heart connection of "leeks" on both sides of the ocean is not without reason. "Leeks" turn over and rely on big cattle, whether it is a good cow or a sick cow, even if it is a bragging like Xiao Jia, the barn that enters the leek is the leek's cow. Short-selling agencies specifically pick sick cows under the mouth, of course, hate value pulled full.
Xiao Jia also does not like short institutions, but he can't stop short institutions from looking at him.
On October 7, 2021, J Capital Research, a well-known short-selling agency, released a short-selling report for FF. The report is 28 pages long and is very promising. "Being sued by dozens of suppliers" and "not disclosing the fact that its Chinese assets have been frozen by local courts" are all very shocking, and the main "crimes" are no cars, no factories, and no money.
No car refers to the "see you next year" full of Jia style. The report said FF had been operating for eight years, failed to deliver a car and again said "next year delivery".
The absence of a factory means that FF has broken its commitment to build factories in the United States and five places in China, and has repeatedly postponed the construction of the sixth factory. "Faraday Future had promised to restart its Hanford plant in California within seven months and mass-produce electric vehicles, but when it visited the factory three times in August and September this year, it found that there was almost no action."
And no money, even more so. The report said that FF would need an additional $1.4 billion in cash to meet its financial targets by 2024, and then asked the soul "Who would want to lend to FF?" ”
After three knives, the report concluded that "FF cannot sell a car", killing.
It can be imagined that when this "death sentence" style report was placed on Xiao Jia's desk, his angry expression was exuberant. Is it intolerable or intolerable, Jia Yueting replied that "cold rice is hot fried, nonsense". He also announced the mass production time of the new car: "In July 2022, Hanford, California, the birth of a new species is coming. ”
This "new species" should refer to the "going" mass production of FF 91. This thing came out in 2018, how "new" can it be by 2022?
Graph/Network
Of course, the verbal battle cannot be distinguished, but public doubts from market institutions cannot avoid the eyes of the supervision department, and the U.S. Securities and Exchange Commission (SEC) has appeared.
The appearance is an appearance, but there is no big battle of "the country has struck".
The SEC didn't just take it personally. Although the power of the SEC has been expanding since its birth in the 1930s, there are still reservations about direct intervention in the market. Short-selling institutions and listed companies can be described as commonplace in the huge US financial market, as long as it is within the scope of the effective market mechanism, the SEC's intervention is a cautious attitude of "can be seen from a distance and not blasphemous".
Of course, with the SEC's brilliant record over the years, the deterrent power of "far-sighted" is enough. Under the "care" of the SEC, FF launched an independent director investigation mechanism and submitted a special report to the SEC. This is the sad scene of Xiao Jia being demoted and demoted by independent directors, and his face is gray.
Interestingly, the credibility of the FF independent director investigation is also quite water-filled. It denies the allegations of the short-selling agency, but has not come up with any strong evidence to dry the goods. Say I can't sell a single one? Of the 14,000 orders, hundreds of them were paid for – how convincing is that? Of course, this little action can't hide from the old birds in the SEC, so the mouth is hard and the mouth is hard, and what should be changed still has to be changed.
FF acknowledges that some information disclosures are inaccurate, internal management is flawed, corporate culture does not pay enough attention to compliance, and so on. Of course, you have to change it, and the result of the change is that Xiao Jia is very injured.
And this is just the beginning, if the mass production of FF91 in July becomes difficult to produce, the short-selling agency will not let Xiao Jia go. If the "mass production" is still those hundreds of orders, then market investors will not let Go of Xiao Jia. Who has the market spared? Why not let the bullets fly for a while, which is why the SEC often behaves like an old dog.
With a sound market mechanism, the regulatory authorities can sit firmly on the Diaoyutai, and the fish will always surface.
Xiao Jia's ending was not good, and the joint efforts of all parties made Xiao Jia so messed up. The short-selling agency of market power fired the first shot, and the supervision agency intervened to transmit market pressure to FF and activate the supervision mechanism in the corporate governance structure. These three forces are interlinked and indispensable, and they are a set of supervision systems. Without anyone, the system is lame.
Malicious counterfeiting vs malicious shorting
Xiao Jia, who has played well in China's capital market, is declining in the United States. Although it has also been fluttering for several years, it is Wang Xiao'er's New Year, and one year is not as good as a year. Jia Yueting's encounter is very enlightening to the supervision and governance of our capital market.
Without the participation of market forces and high dependence on administrative supervision, even the best mechanisms can only stay on paper.
In our view, market supervision rejects utilitarian purposes and has a moral attribute of "purity". Therefore, when talking about "market supervision", it is inevitable to think of administrative organs. However, this is feasible in the huge market activity?
Of the two major transactions in the United States, all about 7,000 listed companies, the SEC can not manage even if it is three heads and six arms. If the SEC is not held full of oversight responsibility, the result is selective enforcement. In individual cases, the number of people who can be frightened is as much as they can be.
And this also means that you don't have to be selected by the administrative supervision department, you can make a lot of money. With Xiao Jia's long sleeves good dance, dodging the "thunder rolling in the sky" should not be a problem. And then what? There is no then. Xiao Jia will always be Xiao Jia, and leeks will always be leeks. And those independent directors will always be the vase of the little Jia people who appreciate food and eat.
Therefore, only the market supervision system of administrative supervision is lame, even if the SEC raises the penalty standard to find a violation and shoots, it seems that the cost of violation is very high, in fact, it is evenly shared on the heads of thousands of listed companies, it is only a few thousandths, and the courage is bigger than Jia Yueting.
What really makes this supervision system work effectively is the forces from the market. Without J Capital Research sniping Jia Yueting, there will be other short-selling agencies. This is Jia Yueting's turn to fight with two fists and four legs. Listed companies counterfeit in order to pursue profits, short-selling institutions to fight counterfeiting is also for the purpose of profit-seeking, how can the small Jia single-handedly cover the sky?
Therefore, there is no original sin in "capital for profit", and it is even more problem for market players to talk about morality. The question is what kind of profit to use, and what kind of mechanism to use to make the moral market entities profitable.
As long as the rules of the game set that conspiring with counterfeiters can make a profit, the counterfeiting business will continue. Not to mention the independent directors who hold the appointment letters of listed companies, but also the leeks who are always pestle on the moral high ground. Today is still scolding the grinning "Xiao Jia is really not a thing" of the moralist, tomorrow into the warehouse FF immediately replaced by "children talk about right and wrong, adults talk about interests" Xiao Jia fans, posing a moral nihilistic face. Seeing others as the original moral sin of profit-seeking, but forgetting to look at yourself in the mirror.
Such moral cleanliness will only make the market more and more immoral, and it will not accept the natural righteousness of malicious counterfeiting vs malicious shorting. And this is the most fundamental problem of China's capital market: everyone pursues profits, but is ashamed to talk about profits; they all want to make profits from the market, but they are not willing to let the market mechanism play a role.
As a result, the market supervision system without a market mechanism has always been lame and has become a hotbed for Jia Yueting.
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