PrezEl Corp Audited Results

PrezEl Corp audited results for the years 2016 and 2020 have been published. According to information available to the public at this time the results for the two years compare as follows:
1) For the year 2016, total revenue from core business was ~ $62.9 million. After announcement of results PrezEl Corp stock experienced a bump despite a loss of ~ $2.8 million. This was attributed to the better than expected revenue and mention about steps to cut down expenses in the earnings call. Per PrezEl management the full benefit of the measures would be visible in the years ahead with profit being forecast from 2020 onwards
2) For the year 2020, total revenue from core business was ~ $74.2 million. Per guidance in earlier earnings call/s, profit was expected for the year 2020. Even though revenue increased ~ $11.3 million from 2016, losses widened to ~ $7 million instead. This was attributed to unexpected adverse market conditions by PrezEl management. PrezEl stock slumped after the announcement of 2020 result as the market was disappointed by PrezEl management inability to adapt to changing market conditions. The company had projected profit as recently as the 3Q earnings call just a few months earlier.
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Substitute the above fictional PrezEl Corp with Presidential Election. Total revenue represent the actual total votes cast for Republican Party Presidential candidate and Total expense represent the actual total votes cast for Democratic Party Presidential candidate, for the years 2016 and 2020. It’s clear as day Republican Party has been hemorrhaging votes to the benefit of Democratic Party. Gain of 11.3 million votes in 2020 is illusory as it masks the greater shift in support to Democratic Party in 2020. It’s the equivalent of brick-and-mortar stores seeing more foot traffic but still losing shoppers to online retailers. With no available evidence of widespread fraud there was no chance to boost other income (line item# 5) to totally offset the difference. If at least a few of the party leaders had forcefully stated, publicly and firmly, to stop the baseless election fraud allegations even as late as last weekend the mess that was witnessed in US Capitol earlier this week could have been avoided. The question then becomes why were they either silent or supporting the effort? Based on what we have seen over the past few years fear of career destruction trumped the acceptance of reality, I can think of no other explanation 🙏

Smart and right thing: My 2 cents

In all the drama over the Chief Minister (CM) position post-State election in Maharashtra last month one thing that is forgotten is that doing the right thing also tends to be the smart thing to do most times IMHO. Below is my attempt to explain.

Facts: No single party emerged with majority after last month’s State election in Maharashtra. It was a fractured verdict by the voters. Pre-poll alliance of of BJP and Shiv Sena (SS) did have a combined majority which would have allowed them to form the next Government if they could have come to an agreement on power sharing and who would assume the CM post. Sadly that did not happen.

What happened immediately after election?
BJP, by virtue of being the party with the most seats, got the first crack at proving they have majority support. Differences between BJP and SS simmered to the fore and turned irreconciliable. Each party went their separate ways trying to cobble together a majority with other parties.

Why was SS insistent on getting CM post and other major portfolios in the new Government?
SS essentially perceived BJP as an existential threat. Both parties tried to appeal to the same slice of voters, with BJP being the bigger party in the State in recent times and nationally too. The alliance was always strictly a business transaction as both parties on their own could not get majority support in the State. Reason SS decided this is the right time to strike is because BJP has gotten much bigger in the past few years and along with it their ambitions have grown too. This election pretty much would have been the last election both parties fought together before BJP decided to go it alone. SS feared getting subsumed by BJP and felt their future existence was threatened in the scenario their party members moved over to BJP if they sensed wind blowing in BJP direction. To put it in business context BJP is the equivalent of a big company trying to get a foothold in a local market by initially partnering with a smaller local player SS with plans to either buy the local company in future or competing directly with them.

What happened next?
BJP tried to get support of other parties to form Government. At first they appeared to be successful till the hastily pulled together agreement came apart with the result BJP not being able to prove majority support. SS meanwhile jumped into bed with other parties to stake a claim to form Government

What is the current situation?
SS has appeared to string together an alliance with majority of sorts and has formed a minority Government

Who is the biggest loser?
BJP undoubtedly. First their pre-poll alliance with SS comes under question for values and judgment. If they knew their core values did not match with SS and still continued with the alliance for ~ 30 years their values are suspect. If they did not know about capricious nature of SS and convinced themselves they could prevail upon SS it reflects poorly on their judgment.

What should have happened for BJP to come out with some positive?
After their failure to show majority support BJP should have chosen to sit in the opposition. This would have made them come across as a party with values and with some of their tarnished judgment restored after the fact. By trying to get their bean counters cobble together a majority with fair weather friends they have come across as just another opportunistic party. Potential practical gain of the SS post-poll alliance imploding on its own due to the incongruities of the parties involved has been lost for now as the new alliance will be determined to make it work at least for the near future. Opportunity to look principled has been lost too

Bottom line: Voters’ fractured mandate should have acted as a wake up call for all political parties, especially the BJP, that voters expect results and none of the parties were considered good enough to get majority support. Past few years BJP has been daring voters to vote for other parties and predicting gloom if they did so. It has been willed to existence by voters precisely doing that. At least now BJP should go back to the drawing board and try to come up with positive message about what they achieved and what they plan/planned to achieve. Avoid portraying anyone with different opinion as opposed to development, anti-national etc. Sitting in opposition by choice would have been the right thing. And a smart thing too. Most times doing the right thing is the smart thing too!