Without Ghosn’s guidance, maybe they’ll wind up poorer (as shareholders already are today)... and maybe their corporate lives will be shorter without Ghosn as the peacemaker. The drama in this action flick might not be over... Ghosn is subject to a “red notice” from international police agency Interpol. As a result, Lebanese prosecutors issued a travel ban and asked him to hand in his French passport. There’s also a Japanese arrest warrant out for his wife on charges of false testimony regarding the transfer of money. And as Sam Antar, an ex-convict and the former chief financial officer of the Crazy Eddie electronics chain, recently said on Twitter, “Governments have long memories.” Antar’s message implied that Ghosn’s lengthy press conference was a mistake. (However, I bet holding it during a thunderstorm, with lightning flashing nearby, will play well on screen once Netflix gets the rights.) Ghosn better watch his back... Japan won’t remember this loss of face on the world stage. And you better believe the Japanese government will be looking to escape the purgatory of humiliation.
Meanwhile, as a value investor, I have to wonder... Has all this blood running in the streets after Ghosn’s departure made – or will it ever make – the stocks of Nissan or Renault cheap enough to be attractive as an investment? These carmakers are in a god-awful, competitive, low-margin, capital-intensive business with a short product cycle. That isn’t a recipe for long-term investment success. And making matters worse, the global car industry is in turmoil today ... It’s shrinking faster than during the depths of the financial crisis, with 4 million fewer vehicles sold in 2019 than the previous year, according to a German auto-industry lobbying group. Even though Nissan’s Leaf is the best-selling all-electric car in the world, I doubt either company will ever become a much better business than it is today. As a result, dropping to a bargain-basement valuation is the only way I expect either stock could become attractive. And even if the stocks of Nissan and Renault did become cheap enough to own... again,
we’re not talking about buying a great business and holding it for 20 years. In a terrible industry like this one, we’d only want to hold for several months to a year... at most. These are trading sardines, not eating sardines.
I suppose we’ll find out what really went on with Ghosn at some point... even if we must wait to watch the movie
WHAT'S IN THE BOX?
that will surely be made about the whole saga. (Ghosn was talking with Hollywood executives before he escaped from Japan.)
CARLOS GHOSN Just the Latest Strange Object Ferried in a Music Equipment Box The Wall Street Journal FURTHER READING
American Consequences
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