Stem, Inc. (STEM) - An Energy Storage Pipedream
CEO, CFO, and Chairman Team All Have A History of Destroying Value
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Dear Reader,
We are back again to talk about an energy storage pipedream. The OpTrack database tells us investors should be very skeptical about this team’s ability to deliver shareholder returns.
STEM Business Overview
Per tradition, we have no idea what this company does, and don’t particularly care. In the interest of completeness, here’s a (slightly truncated) buzzword-laden paragraph from the company’s last 10-K:
Stem, Inc.is a global leader in AI-driven clean energy solutions and services with a large, digitally connected, renewable energy network, providing customers with (i) an energy storage system, sourced from leading, global battery original equipment manufacturers (“OEMs”), that we deliver through our partners, including developers, distributors, and engineering, procurement and construction firms, (ii) edge hardware to aid in the collection of site data and the real-time operation and control of the site plus other optional equipment, (iii) ongoing software platform and professional services to operate integrated energy storage, and solar systems, through our Athena® artificial intelligence (“AI”) platform (“Athena”), and (iv) solar asset performance monitoring and control, through Athena’s PowerTrack application. In addition, in all the markets where we help manage our customers’ clean energy assets, we 3 have agreements to use the Athena platform to participate in such markets and to share the revenue from such market participation.
STEM People Overview
STEM’s CEO and Director is John Carrington. John’s prior public company experience was as EVP of Marketing and Corporate Development at First Solar from May 2008 to August 2009, during which time FSLR declined by ~50%. However, he likely deserves some benefit of the doubt as his role was sub C-Suite level and that period overlaps with the nadir of the GFC.
STEM’s CFO is William Bush. His prior public company experience includes:
Various C-Suite roles at ZVUE, which ultimately filed for bankruptcy <1 year after he left the company
Board Member of Towerstream (TWER), which has declined by ~99% on his watch
Board Member of Musclepharm (MSLP.Q), which declined by ~97% during his tenure
Board Member of Findex.com, which declined by ~90% during his tenure
Board Member of Appreciate Holdings (SFR), which is a former SPAC that has declined by ~95% since the de-SPAC
STEM’s Independent Chairman is David Buzby - great name - with a not so great track record:
On the board of ECO2 Plastics, which filed for bankruptcy during his tenure
Founding Investor, Chairman and CEO of the famous bankruptcy, Sun Edison
He is currently on the board of one SPAC (Spring Valley Acquisition Corp II) and sponsoring a second SPAC (Climate Transition Capital) - while these are both TBD outcomes - our data indicates the base rates would indicate those involved in multiple SPACs tend not be great operators
David’s best outcome that we can find is Conversant, LLC (IPO’d as ValueClick), which IPO’d at $19/share in 2000 and was sold to Alliance Data Systems for $35/share 14 years later, a ~4.5% CAGR
Please note, we sincerely believe that the data points provided above are not cherry-picked and are representative of the track record of the corresponding operators. However, in most cases these operators have other professional experiences at private companies that we don’t have data on or more junior roles at larger corporations. These are not exhaustive work histories.
Miscellaneous Other Data Points
STEM is itself a SPAC, which again, our data would tell you is a red flag in and of itself
The company’s COO, Mark Triplett, resigned in late 2022
STEM has never reported gross margins >10% and has never reported positive EBIT or Free Cash Flow (except for Q3 2020 which was marginally FCF positive)
Insiders have been consistent sellers of their own stock
Disclaimer: Please remember this post should not be taken as investing advice and please consult a licensed financial advisor before making any investment decisions. The OpTrack team did its best to present everything above in a factually accurate and unbiased way, but there is always room for error in biographical data on executives. There may be mistakes of omission or commission in the above - if you find one - please reach out to OpTrack@OpTrack.io so that we can correct it.