Darryl Sparey, co-founder
“We struggle to think of anything analogous in the history of the automotive industry, in which a brand has lost so much value so quickly.”
These were the damning words of a team of JPMorgan analysts in March, whose assessment of Tesla’s unprecedented fall from grace confirmed what many of us already suspected: that Tesla’s recent stock crash isn’t just significant, it’s historic.
$565bn: that’s how much Tesla’s market cap has crashed in the two months following Donald Trump’s January inauguration. In this blog, I’ll talk about what it can teach us about the importance of CEO conduct on corporate reputation.
In our second Coverage to Capital Report, we examined the business impact of the company’s CEO in the only way we know how: by looking at the Hard Numbers.
The research looks at UK-based unicorns - those rare, privately-held businesses that are valued at more than $1bn.
As a wise and devilishly handsome gentleman states in the introduction,
“Technology start-up unicorn businesses in the UK who have CEOs or founders who are active in the media were more successful at raising capital than those who were not.”
There is a clear (and surprisingly stark) correlation between a founder’s tweet volume, earned media coverage and LinkedIn following and the amount of funds their company has raised.
So, we know from the Hard Numbers that there’s a demonstrable business benefit to a strong CEO media profile.
But here’s the rub: what if the CEO goes bad?
Those of you who know me will know that I’m a fan of comic books. One of my favourites in recent decades is Irredeemable, a comic driven by a simple question: What would happen if the world’s greatest superhero became the world’s greatest supervillain?
Elon Musk is not the first rockstar CEO. It’s normal for business leaders to become influencers in their own right. Dragon’s Den (or Shark Tank for our US-based readers), the rise of thought leadership, the proliferation of social media - the market cap of a business has likely never been so intrinsically attached to the personality, health and conduct of its figurehead.
But just as the market cap is linked, the principles that define a business and its CEO must also join hands. A 2023 poll by Gallup found that 71% of Republicans would not even consider buying an electric vehicle, compared to just 17% of Democrats. When the values of your company are intrinsically bipartisan, the CEO must be on the same side of the fence as its customers.
Above all else, it’s the misalignment between Musk and Tesla that has landed them in such scalding water.
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Elon Musk’s recent conduct has been labelled a PR problem by many. But this isn’t really about PR. This is a behavioural problem.
Try as they might, the shareholders’ jurisdiction over Musk is limited. In an era of the rockstar CEO, Tesla’s recent crash serves as a reminder that, sometimes, rockstars don’t want to do as they’re told.
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PRovoke “50 Best Agencies in the UK” list - Hard Numbers is one of the 50 BEST PR agencies in the UK! Thanks to our friends at PRovoke media, who have recently selected Hard Numbers as one of the 50 BEST agencies in the UK. You can read the frankly brilliant write-up from Maja Pawinska Sims here.
Co-founder Paul Stollery featured in ITPro - In response to Anthropic recently saying that they don't want prospective hires to use AI as part of their application process, our Co-founder Paul Stoller was asked what employers seek from applications by George Fitzmaurice. You can read more in ITPro.
Onclusive on the Road Event - I joined a panel of speakers which, amazingly, included national media journalists, political communications experts and a former Love Island winner! There are a few highlights from the event here, here and here.
News by Numbers - Read our latest “News by Numbers”, including news of recent fund raises by Saronic, NinjaOne, Lambda and StackAdapt. If your business is raising or has raised investment money in the last month, let us know for our next edition.
