Short Shrift for Short-Sighted Short Sellers
Dear friends, shareholders, employees and supporters,
The United States has the most efficient capital markets in the world. It’s part of what makes this nation great. During the last hundred years or so, this efficient use of capital has enabled the greatest period of innovation in human history. The stock market provides companies access to the capital they need to succeed and investors the opportunity to share in that success. An efficiently functioning stock market is critical to a healthy economy.
There are many ways in which investors can participate in the stock market. One, which is receiving a great deal of attention at the moment, is short selling. As a public company CEO and an issuer, I have mixed feelings about short selling. I recognize that it can be a useful contributor to a healthy and efficient stock market because it can help in identifying and correcting overvalued securities. An honest and informed short seller that analyzes a company’s business plan, operations, finances, leadership and prospects, and finds that company to be overvalued, can profit by coming to that conclusion before the rest of the market inevitably identifies the same weaknesses. I’m in favor of that. One should not pity the target of that kind of short selling, particularly if the overvaluation is driven by unrealistic or even dishonest projections on the part of the issuer.
But what if the issuer is not dishonest and the projections are reasonable? What if certain short sellers create a narrative just to support their short position? They know that if they can be convincing enough, in an already opaque and complicated world, that the seeds of doubt they sow can lead to selling and price depreciation. They know that they can profit from the losses of the shareholders who believe, correctly, in the issuer. That’s not efficient, that’s dishonest. That kind of behavior does not support innovation and entrepreneurialism. It destroys the opportunities created by the inventiveness and hard work of the entrepreneur, and it destroys the value of the position of the honest investor. It undermines the essential ingredient in the investor’s arsenal – reliable information.
I get a lot of advice in my capacity as CEO of Beam Global. One of the most common is that I should not take negative comments about the company personally. Well, I do take them personally. Like everything else to do with the company, I take them very personally indeed. I love this company and I am very proud of the team, the products, our customers and our shareholders. It’s insulting to our hard-working team, our discerning (often repeat) customers and our loyal supporters and shareholders to suggest that we are anything other than what we say we are.
Almost all public comments about Beam are resoundingly positive. We have regular corporate and government customer endorsements in our press releases (I’m told that that is unusual by our Public Relations company). I personally spend a great deal of time on the phone, in video meetings or face to face with customers, shareholders, vendors and other interested parties. I am always willing to listen to constructive criticism during those interactions and the overwhelming majority of feedback I get is positive – very positive. We have never had a product returned or any customer that regrets driving on sunshine.
But I know that from time to time, particularly when our share price has increased in value, there will be those who will attempt to profit from sowing the seeds of doubt about our products, our plan, our team and our leadership.
Most businesses are fairly complex. Beam is one of the simpler and easier to understand but even so, it’s not difficult to selectively identify historical data points, magnify insignificancies and cast half-truths, opinions and falsehoods as supporting facts to a negative narrative. That has happened and it will happen again. Where there’s profit there’s motive and where there’s motive there’s often action.
Fortunately for Beam, there is a lot of good and honest research available for the discerning investor. Professional, hard-working Wall Street analysts who have spent months researching our company and the industries in which we operate, have released detailed and well researched reports. Reports for which Beam paid nothing. Reports over which Beam had no influence or input other than to answer the questions of the analysts and to open our factory, products and business practices to their scrutiny. Their conclusions are unanimously positive.
Those who have come to the opposite conclusion have never contacted us, never seen our operations, never tested our products and never shown the slightest inclination to do so. They have created the negative narrative but without the hard work required to know the truth. I will leave it up to the investment community to conclude what their motivations might be.
Beam Global is in the best position in our history. The (global) political, consumer, market and environmental conditions are firmly in our favor. Our ability to execute, be financially responsible and grow have been proven in fact over the last many years. If you read or hear something about Beam which makes you doubt us, take a look at the published respected analysts’ reports about us or all the very positive comments made by our customers. If you don’t get the answers you are looking for there, then contact me. My direct line and direct email are at the bottom of this letter. Remember, I have a company to run and I owe it to our customers, employees and shareholders not to spend all my time responding to nefarious commentary, but I’ll say it again, contact me. Ask me your questions, no matter how tough you think them. If disclosure rules allow, I’ll answer them in the only way I know how – honestly and with pride in what we are doing.
We have fantastic opportunities ahead of us. I could not be more enthusiastic about what I see coming in 2021 and beyond for Beam. I believe that concentrating on the nexus of clean energy and transportation will continue to place us in one of the most exciting transitions in history. We will vigorously pursue profits doing something we can all be very proud of. Thank you for being involved and let us all ensure that facts and truth guide us, and not allow those who know nothing, and care even less, about our fundamentals to slow us down, even for a second.
President, CEO and Chairman of the Board
+1 858 333 8031
This Beam Global management communication may contain forward-looking statements. All statements in this communication other than statements of historical facts are forward-looking statements.
Forward-looking statements are generally accompanied by terms or phrases such as “estimate,” “project,” “predict,” “believe,” “expect,” “anticipate,” “target,” “plan,” “intend,” “seek,” “goal,” “will,” “should,” “may,” or other words and similar expressions that convey the uncertainty of future events or results.