Red Bull Gets The Last Laugh
Companies are a weird thing. You get a few people together, or don’t, and declare yourself a secondary entity capable of making decisions you wouldn’t want to be liable for as an individual. You, as an individual are making the decisions and for all intents and purposes the company is nothing more than a mask you wear to shield your personal self from the detriment of the unknown, your mistakes.
Some mistakes are big, some mistakes are small. Some you should go to jail or be penalized for, most you don’t. Let’s hop over to the UK where Rich Energy has pushed itself into the spotlight. Rich Energy as you know, or probably don’t is an energy drink manufacturer which has taken aim at Red Bull. While Red Bull sells almost 8 billion cans of its namesake energy drink annually, Rich Energy stated it produced 90 million cans.
You need to start somewhere of course and for William Storey, that starting point was formula one, kind of. Without getting into too much detail, Rich Energy, a company that posted £581($730) in its bank account in September 2017 decided it wanted to buy an F1 team because, honestly, who knows why. I guess it’s because Red Bull has two teams (Red Bull Racing and Scuderia Toro Rosso) and Storey just really doesn’t want Red Bull to have nice things.
Fast forward to summer 2018 and F1 team Force India was placed into administration (a last resort before bankruptcy in the UK). Rich Energy decides they want to purchase this F1 team for £100 million but the British team rejects the offer because upon basic inspection Rich Energy does not have close to the £100 million asking price. Fast forward again and they announce themselves as the title sponsor of the Haas F1 team.
Ignore the fact that Rich Energy did not have the money to pay Haas, instead using a bank guarantee to secure the deal, or the fact that it’s almost impossible to find Rich Energy anywhere, even when you try, or that they stole their logo from Whyte Bikes, were found guilty, and missed their payment date. Instead, just focus on this tweet which came from Rich Energy on Thursday:
“Today @rich_energy terminated our contract with @HaasF1Team for poor performance. We aim to beat @redbullracing & being behind @WilliamsRacing in Austria is unacceptable. The politics and PC attitude in @F1 is also inhibiting our business. We wish the team well #F1 #richenergy”
That was followed up by this statement from the shareholders:
“The shareholders who own the majority of Rich Energy would like to clarify certain statements that have been circulated in the media from an unauthorised source.”
“We wholeheartedly believe in the Haas F1 Team, its performance, and the organisation as a whole and we are fully committed to the current sponsorship agreement in place. We also completely believe in the product of Formula 1 and the platform it offers our brand.
Clearly, the rogue actions of one individual have caused great embarrassment. We are in the process of legally removing the individual from all executive responsibilities. They may speak for themselves but their views are not those of the company. The incident is very regrettable; we will not be making further comment on this commercially sensitive matter and will be concluding it behind closed doors.”
Which was then followed up by this statement from William Storey, the CEO and founder of the company whom the shareholder statement infers is behind the initial tweet:
“I am the CEO and founder of Rich Energy and control the board of directors and all assets.
I also control more than 51% of the shares
There has been an attempted coup of my position by a handful of shareholders who have a cosy relationship with Red Bull and Whyte bikes.
These shareholders led by Neville Weston and Charlie Simpson have failed in their efforts.
All key stakeholders support the current strategy of the UK’s premium energy drink Rich Energy ”
He went on to say that there was an “attempted palace coup” and reiterated that he is in full control of the company. Well, okay then. This does bring into question how a CEO and other shareholders can disagree over who controls a company. Sure, Storey may control more than 51% of the shares but if those shares don’t have the same voting rights as other shares then he may be in trouble.
Perhaps one of Rich Energies benefactors has an agreement that allows them to purchase a certain percentage of shares after a triggering event. Or maybe the shareholders know about as much about their shares as they do about selling energy drinks. Whatever the reality I’m sure it will be entertaining.
Let’s go back to the beginning, what even is a company? In the case of Rich Energy it’s a listless sponsorship that says it sells energy drinks, occasionally. If we look at Uber and WeWork we get large corporations that lose billions of dollars annually because eventually those loses will turn into growth (I mean, yes, sure. I also believe that if I had been given $10+ billion dollars over six years I would be able to build a mildly large business). Lastly, if you’re GE you’re a large corporation that loses billions of dollars annually, but those losses don’t equate to growth so your stock tanks. Needless to say, I don’t think anyone actually knows.
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