Enron used a different accounting type named mark to market or MTM. That accounting style enabled them to put a price on futures and make prediction on their books. All of this was complete rubbish because none of it was backed by real stuff. Add to this an overconfident CEO, a CFO that was pretty much-robbing people and too much hype. Only one analyst questioned the CEO about the MTM accounting style at the time, the analyst got shut down during an investor call because everyone was caught up in the hype.
I think the problem with this situation is that they overlooked the capital needed to finance the pipeline of work. This is why I sold when they mentioned a CR a couple of months back, it was just an enormous red flag. This is where I suspect someone either didn't do a financial modelling or someone literally ignored that capital was needed to finance the work or they made big assumptions that shareholders will happily finance all of that with CRs. Might explain the change of CFO (always a warning sign too).
I believe that the CEO is unfit to run a business because EMC was basic stuff. MO might be excellent a financing an R&D company but he is not a good fit to commercialise a product.
This company is not in a good spot, assuming they still target islands as previously stated by the company:
1. The market has shifted, the price of diesel to power islands is plummeting.
2. They still have no product to sell and missed their 2018 deadline. They did put a date on their roadmap and made promises to the market. This is basic product management stuff, don't put a date if you are not sure.
3. Taking too long to ship a product can be deadly, Mauritius and similar prospects have been waiting for years too. These people also need to make decisions about their energy strategy considering their ageing infrastructure. EMC could have helped because I have seen transportable power stations being shipped to these islands.
4. Why didn't they disclose the spill with CETO5? What does this mean for futures industrial accident? They will have some, it is inevitable.
5. The CEO prefers the money and he has too little stake in the company.
6. The company has too little experience in running a profitable business, if they have a product they can sell, they will need a serious change of management that has experience in selling and reacting to change in that market.
