By Charles Roques
Phineas Taylor Barnum is known world-wide for his circus showmanship and ability to tap into the public’s desire to be entertained and shocked. His name is an adjective for self-promotors and over-the-top marketers. Barnum may have made some outrageous claims, but there’s no record of him saying there’s a sucker born every minute. He didn’t see what he was doing as taking advantage of anyone so this disparaging epigram was most likely coined by a jealous competitor or a journalist.
Barnum, however, did contribute to our language by adding the adjective jumbo, named after his famous pachyderm attraction. He understood the power of language and its ability to ignite our imagination … and that we are often willing to pay for it. He also coined the phrase, “every crowd has a silver lining.” His essential meaning: if you get enough people to hear you, money will follow. This also demonstrates how a phrase can be misheard or misread, something not lost on cannabis stock promoters.
Language can be persuasive, powerful and suggestive, but some people use it better than others. While we may like to hear what reaffirms our own ideas or what we would like to imagine, an astute investor can still spot the babble and hyperbole. Cannabis companies may be entering a new frontier, but descriptions of where they are going may not reflect reality.
Lapsus linguae, latin for slip of the tongue, is not unusual in this sector of frantic press releases, and they can be quite revealing. One CEO, whose company is saddled with dubious toxic financing and share dilution spoke of the “riggers,” instead of rigors, of uplisting his company.
Sometimes you don’t have to read between the lines, you just have to read the lines. Getting the latest news that something has been decided by the board of your company, composed of knowledgeable industry executives seems fair enough, but watch for details. One company’s recent filing claimed, “These actions were approved … by our Board of Directors and one shareholder who holds a majority of the Company’s voting power.” That shareholder was the CEO. Does your company have a board of one director?
Then, there’s the language of executive presentations. Trying to economize too much while using lofty language can appear cheap and indicate compromise in other areas of management.
One cannabis-related company’s recent presentation showed its CEO seated in front of a digitally projected alpine scene, giving his announcement the feeling of a late-night infomercial. I thought more about air fresheners than cannabis. He explained in the release that it was “ … our first published video from our in-house ‘studio.’ I put that in quotes because we didn’t build a sound stage or studio but rather took advantage of our office space for a combination of authenticity of origin and to be on hand for same day responses to articles and news in the industry and timely shareholder updates.”
Calling a space a studio might be a stretch when the recorded person is merely sitting in front of an office wall, talking to a small video camera. And from this alpine perch, so lovingly displayed in the background, this CEO spoke of stocking the company’s vending machines with music-inspired chocolates named after different songs, complete with liner notes about the song.
This kind of approach might sell some products, but are you sure you want to invest? What about the chocolate named after a song you hate? Musical tastes can be pretty subjective, market research or not. Plus, the CEO spoke very little on the purity or quality of the product other than its strength.
Hopefully you don’t base your investment decisions solely on press from a company that interests you, ridiculous or not. You might not understand what a company is announcing, but don’t let your imagination give it false meaning. Luckily, you can usually see through this, revealing possible hints of deception or ineptitude.
Silly language can be harmless at times but it doesn’t seem quite so funny when the sideshow comes from companies with poor performance, dubious products or toxic financing. Pay attention to how a company runs its circus and don’t be persuaded by the ringmaster’s pitch.