Update: We overlooked the matter that the investor call should not be during stock market trading hours. After taking that into account, we’re changing the recommended/requested time to 6:30pm PST.
Scientific evidence has shown that our mood varies through the day. Not only does our mood vary, though — the optimal times for doing heavy thinking or being creative occur at different times. It’s not the same for every person. This is the focus of the chronobiology field.
Dan Pink, a New York Times bestselling author, shows in his book When: The Scientific Secrets of Perfect Timing that it matters when we make decisions.
What does it have to do with Tesla or Cleantech?
This is not a book review site. What does this have to do with Tesla or cleantech? A lot, in fact. Most people visiting this site want Tesla, cleantech, renewable energy, and electric vehicles to succeed. If cleantech companies are public, we want to draw in more customers and investors who understand the long-term vision and potential. Success breeds more competition, as they say. More renewable energy adoption is better for all of us. If a simple change of when the quarterly investor conference call creates more positive outcomes, that seems worthwhile to consider. The effort is very low and the reward is very high.
Mr. Pink gave a hilarious keynote at a conference I recently attended. It was so good that I bought his book and I am quoting liberally from it below.
“CEO’s are human beings, of course, and therefore presumably subject to the same daily changes in mood as the rest of us. But CEO’s are also a stalwart lot. They’re tough minded and strategic. They know that millions of dollars ride on every syllable they utter in these calls, so they arrive at these encounters poised and prepared. Surely it couldn’t make any difference — to the CEO’s performance or the company’s fortunes — when these calls occur?
“Calls held first thing in the morning turned out to be reasonably upbeat and positive. But as the day progressed, the ‘tone grew more negative and less resolute.’ Around lunchtime, mood rebounded slightly, probably because call participants recharged their mental and emotional batteries, the professors conjectured.
“But in the afternoon, negativity deepened again, with mood recovering only after the market’s closing bell. Moreover, this pattern, held ‘even after controlling for factors such as industry norms, financial distress, growth opportunities, and the news that companies were reporting.’ In other words, even when the researchers factored in economic news (a slowdown in China that hindered a company’s exports) or firm fundamentals (a company that reported abysmal quarterly earnings), afternoon calls ‘were more negative, irritable, and combative’ than morning calls.
“These findings have wide implications, say the researchers. The results ‘are indicative of a much more pervasive phenomenon of diurnal rhythms influencing corporate communications, decision making and performance across all employee ranks and business enterprises throughout the economy.’ So stark were the results that the authors do something rare in academic papers: They offer specific practical advice.
“’[A]n important takeaway from our study for corporate executives is that communications with investors, and probably other critical managerial decisions and negotiations, should be conducted earlier in the day.’” (emphasis added)
— “The Hidden Pattern of Everyday Life.” When: the Scientific Secrets of Perfect Timing, by Daniel H. Pink, Canongate, 2018, pp. 18–19.
How did Tesla fare the last two years after earnings?
Tesla’s last earnings call was on April 24th, 2019, at 2:30 PM PDT. That means the Wall Street know-it-alls on the East Coast were listening at 5:30 PM EDT. Both 2:30 PM and 5:30 PM are close to the lowest points for emotional balance in the afternoon. This is not setting up Tesla for success with investors. By moving the call to 6:30 PM PDT, Elon and fellow executives would be in a position in which their emotional balance would be strongest in the first half of the day.
Below are two charts on how Tesla stock performed the day after earnings for the last two years. The first is the actual price change and the second is the percentage change. Prices are from MacroTrends data. In five of the last eight quarters, there has been a negative price change the day after the earnings call.
Although this seems like such a simple change for Tesla, the impact of moving the investor call earlier in the day could be very profound. Many are skeptical about Tesla and future promises. If Tesla is communicating from a position of strength, it can minimize errant words, reduce mistakes, promote positive events, and ensure Elon and the executive team are functioning at their emotional best. Listeners may also simply have a better outlook from feeling better themselves.
I hope Tesla and other renewable energy companies take such a change seriously and debate the merits of moving their investor calls to earlier in the day.
Tesla, move your investor conference call to 6:30pm PST and reap the benefits!
- Apr 24, 2019 — Tesla Releases First Quarter 2019 Financial Results
- Jan 30, 2019 — Tesla Releases Fourth Quarter and Full Year 2018 Financial Results
- Oct 24, 2018 — Tesla Releases Third Quarter 2018 Financial Results
- Aug 01, 2018 — Tesla Releases Second Quarter 2018 Financial Results
- May 02, 2018 — Tesla Releases First Quarter 2018 Financial Results
- Feb 07, 2018 — Tesla Releases Fourth Quarter and Full Year 2017 Financial Results
- Nov 01, 2017 — Tesla Releases Third Quarter 2017 Financial Results
- Aug 02, 2017 — Tesla Releases Second Quarter 2017 Financial Results
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Disclaimer: I currently own Tesla shares. A recent discussion with $TSLAQQ folks confirmed they are more worried about Tesla’s finances and profit than advancing the world towards sustainable energy. I disagree with their approach. This article is my opinion and is not meant to be investment, financial, or car buying advice. Please see a properly licensed financial advisor to discuss investments. Follow me on Twitter @vijaygovindan17 or send me an email at firstname.lastname@example.org.
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