Rational Perspective

Rational Perspective

Alec Hogg is a financial journalist who founded Biznews.com. The Rational Perspective podcast is his regular look at people and events in the business news.

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    As authorities start investigating, big bets in wake of Elon Musk's "Tesla going private" tweet

    Pretoria-raised super entrepreneur Elon Musk is a global personality on whom there is no middle ground. His disruptive approach is now challenging long- held stock market rules on the disclosure of share price sensitive information. An unprecedented "going private by tweet" has sparked an investigation by the SEC, delighted fans and emboldened short sellers - further polarising the divisive opinions about the CEO of Tesla. What's certain, though, is this time he will be exposed as an ambitious huckster with an overworked hype machine - or, as his supporters claim, will finally be recognised for his unmatched genius.

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    Another big promise from Musk, but serious investors aren't biting, treat $82bn Tesla buyout as a joke

    South African born entrepreneur Elon Musk is back in the headlines after a move that was outrageous, even by his standards. It came via twitter, where Tesla’s founder has been super-active in recent months as the pressure on his business has escalated. It seems few had any inkling of what he was about to unleash. Musk owns 20% of Tesla’s shares. Apparently he will now buy out the other 80% at a price of $420, with funding already secured. That's far above the highest level the share has traded at. And at a price where lenders would need to stump up $70bn in cash to buy a company that hasn't made a profit in any of its 15 years in business. For context, the biggest ever leveraged buyout was in 2007 when a private equity group that included KKR and Goldman Sachs did a $45bn deal to acquire Texan utility TXU Energy. After surging on the news, Tesla's share price eased back to around $370, a $50 discount to the supposed buyout offer. That tells us everything. Serious investors think it's a hoax.

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    Man who saw the GFC coming, The Big Short star Steve Eisman, warns Tesla's bubble is going to burst

    After this week’s release of its quarterly results to end June, Tesla’s share price jumped from $300 to $330 because the company had burned through $730m in cash – less than the $900m Wall Street’s analysts were expecting. While Elon Musk's fans went wild, cooler heads warned that there is still only enough cash to last until the end of the year. Steve Eisner, immortalised in The Big Short, is among those who are now betting that the Musk magic won't last much longer.

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    The whitewashing of Zimbabwe’s ancient history

    In this episode we get a timeous reminder of how powerful people are sometimes able to distort history to serve their own ends. For decades, a myth was propagated around Great Zimbabwe, the massive ancient city structure near Masvingo, 280km east of Bulawayo. The whitewashing is laid bare in this superb report by Rebecca Kesby of the BBC World Service.

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    Magda Wierzycka: Helping SA back from brink - and that infamous convo on SAP's corruption

    At 12, Magda Wierzycka's family risked their lives escaping communist Poland only to spend the next year in an Austrian refugee camp before her medical doctor parents were offered a new start in South Africa. That experience was a big motivator in this qualified actuary's decision to lift her head high above the parapet when her new homeland needed it most. Last year, when resistance against Gupta-driven industrial scale plunder of South Africa was at its lowest, Wierzycka went very public with her concerns. Hindsight shows she helped greatly in turning the tide. With the old regime having been ejected, Magda has now returned to her day job. I caught up with her in a sweltering London yesterday where Sygnia's founder and CEO is investigating ways to globalise her mushrooming business. We spoke about South Africa's immediate past, its likely future and how she feels now about the very public position she adopted. An exercise in courage and, yes, testicular fortitude.

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    Eskom on retribution mission against McKinsey and others which plundered R19bn since 2012

    This week’s release of financial results from South Africa’s State-owned electricity supplier Eskom was always going to be worth watching. It marked the first public engagement of a fresh board of directors installed 69 days earlier by a forceful new political head. The occasion lived up to its billing. Those who plundered a now quantified R19bn from Eskom are going to be pursued for as long as it takes. Which is bad news for a number of multinationals led by consulting group McKinsey which earlier this month repaid almost R1bn in fees it received from the parastatal. It now transpires that McKinsey’s malfeasance was merely the tip of an iceberg...

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    Naspers CPO Aileen O'Toole on the outperforming group's secret sauce: Executive pay is 90% based on risk

    In the latest episode of the Rational Perspective podcast, Naspers group's Chief People Officer Aileen O'Toole provides perspective on the eye-popping earnings of Naspers CEO Bob van Dijk. And it doesn't take long to realise that like his predecessor, Naspers chairman Koos Bekker, Van Dijk is living proof that the group's secret sauce delivers. O'Toole takes us through the thinking that shapes the Naspers pay policies and promotes its highly entrepreneurial culture. And unpacks the highlights of a 25 page executive remuneration report released last week which provides greater transparency for shareholders.

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    Paul O'Sullivan: We'll force Hogan Lovells to come clean on SA State Capture role

    South Africa's famous forensic investigator Paul O'Sullivan and his friend, British peer Peter Hain, are on a mission to expose global law firm Hogan Lovells. The duo have accused the London-headquartered operation of facilitating the destructive process of State Capture in South Africa in much the same way as McKinsey, KPMG and SAP have admitted to doing. They're determined to force Hogan Lovells to own up and compensate the nation for the damage it wrought. I caught up with O'Sullivan at a pub in central London...

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    Meet Tshepo Mahloele - Big Capitec shareholder, ABSIP's "CEO of the Decade" now accused by Holomisa as kingpin of corrupt network

    The young democracy of South Africa is a noisy place, especially during periods of political power shifts. And after the ejection of Jacob Zuma, wild accusations are being thrown against both the guilty and innocent. Even in this context, a scathing five page letter penned on political party UDM's letterhead by its leader Bantu Holomisa is impossible to miss. Sent to president Cyril Ramaphosa and then surreptitiously distributed via the internet, Holomisa targets four black businessmen. He pegs financial services entrepreneur Tshepo Mahloele as the kingpin of this apparent "iceberg of corruption" which he claims has plundered the State pension fund. I met Mahloele this week and took along my recorder to hear his side. And got the story of a low profile financial service entrepreneur who has rode the Capitec wave from R30 to R900 and whose private equity fund has invested $1bn into African infrastructure. An unsung hero or a corrupt villain? I know where my money lies.

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    McKinsey’s South African mea culpa bombs as it claims "no corruption", critics reject apology as too little, too late

    I enjoyed a front row seat at the first public engagement by Kevin Sneader, new global managing partner of the world’s largest consulting firm, McKinsey & Company – the business in the vortex of South Africa’s State Capture scandal. Sneader, who has been in the post for exactly a week, accepted an invitation from GIBS, a leading South Africa’s business school. A scathing riposte to his 20 minute speech was delivered by the other panelist, Bonang Mohale, CEO of Business Leadership South Africa. Mohale, who is as eloquent as he is outspoken, was formerly chairman of Shell South Africa. The temperature rose even further when the floor was opened to questions where former Competitions Tribunal's chairman David Lewis and forensic Investigator Paul O'Sullivan kept up the pressure. A must listen.

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