Hey crew, here’s to another week of cutting through the noise and focusing on what actually moves financial minds forward.

No buzzwords, just the stuff affecting wallets, business & the economy:

⚡️ The Story of Enron: What Ethiopia Can Learn

☀️ Hawassa Industrial Park: Keeping The Lights On

Here’s to the 117th edition

Let’s dive in.

Enron.

The darling of the 90s Wall Street era.

$60,000,000,000 market cap at its peak.

Competitors hated them.

Other companies wanted to be like them.

Soaring profits, glaring reviews and a party that never seemed to stop.

And then, on Oct 16, 2001 it all came crashing down 📉

Why?

Some smart people made some ‘smarty pants’ decisions which resulted in dumb results.

Those results plummeted the stock price from $90.75, when the company was flying high, to $0.26 (Yes, 26 cents!)

So imagine, if you had 100 shares in Enron back in 2000, that means that, on paper, you had $9,075 worth of stock.

That paper money would mean that your ownership stake deteriorated to just $26 ($0.26 × 100) at the time of the collapse.

Yikes!

Now Enron has its own origin story:

Fancy way of saying that they bet on energy prices on the market. Quite clever for a energy provider!

Not giving any ideas to ኤልፓ, please don’t shut off our lights 🥹

Enron’s demise was their own doing.

They exploited some loopholes with accounting tricks like using a mark-to-market (MTM) method, essentially claiming revenue form long term contracts the moment they were signed (Which Enron convinced the authorities that it was legal, those clever bunnies)

When projects didn’t materialize, they hid big losses in ‘off-shore’ subsidiaries that they called Special Purpose Entities (SPEs).

This made it very difficult to track and yet the sun kept shining until irregularities kept showing up.

Then, the dominos started to fall.

The once giant and innovative company started to crumble.

Questions were raised and fingers were pointed.

In the end, thousands of jobs were lost, pension funds disappeared overnight, shareholders became penniless and the call for new regulations intensified.

All Things Considered

Enron is a cautionary tale…but history tends to repeat itself, even if it’s on another continent.

Ethiopia has just started to warm up to the capital markets: companies are listing, news outlets are reporting on the progress and investors who long starved for a place to park their money are starting to open brokerage accounts.

Solid news.

Yet, investing in equities is not be taken slightly.

Companies have to be studied, understanding their market positions, what they do, how they make money and if what they are reporting is actually true.

That’s why auditors are so important (FYI, auditors Arthur Andersen was involved in the Enron scandal…they are no longer with us. RIP 🕊️)

We’re not saying that the companies currently being traded are the next Enron, far from it, but shareholder pressure combined with an economy still trying to find its feet can jiggle stock prices like they’ve never jiggled before.

And to stabilize it, management might resort to a few methods, some more questionable than others.

ESX does not broadcast any financial news pertaining to the stock market but that's an aspect of the markets that will need to be addressed soon.

Of course, you should always make your own due diligence about a company you want to invest in.

Traditional and sustainable businesses like banking and insurance tend to be a safe bet (not financial advice guys but that’s the consensus)

Don’t follow the herd, understand the fundamentals and look for signs in the numbers when contemplating whether you should double down your position or pullout 🤔

If you’ve been keeping an eye on the global trade war between the U.S. and pretty much the World but mostly China, you know it is basically a giant, tit-for-tat macroeconomic game.

Every time the U.S. slams a heavy tariff on imports from China, supply chains adapt and find a new route to the American market.

And right now, that route runs through our own backyard: Hawassa Industrial Park.

The U.S. Department of Commerce just launched a massive investigation into silicon solar cell imports coming out of Ethiopia. A coalition of American solar manufacturers are claiming that the brand-new factories in our industrial parks are being used to duck long-standing U.S. anti-dumping duties on Chinese goods.

Just this past April, Prime Minister Abiy Ahmed was in the Hawassa Industrial Park cutting ribbons for the Toyo and Origin Solar factories. The goal? A massive 11.3 gigawatts of clean-tech capacity. But to Washington, that sudden boom looks a little too convenient.

The U.S. accuses these new additions to Hawassa of Origin Circumvention.

Taking raw materials from China, ship them to Ethiopia for a final assembly and then slap a "Made in Ethiopia" label on the box before shipping it to America.

The U.S. petition alleges that nearly 70% of the finished solar modules leaving Ethiopia are built using Chinese-origin wafers.

To draw the line between a genuine Substantial Transformation and Minor Assembly, investigators use a rigid, multi-point statutory checklist.

If the factories can prove that the facilities represent significant irreversible capital investment, generate important local employment and add high technical value to the process, they have a strong legal argument for "substantial transformation”.

An international trade investigation might sound like bad news for our investment climate, but if you look at the bigger picture, it reveals how neutral countries can actually win big during a trade war.

The U.S. is playing hardball and is expected to drop a preliminary ruling by December 10, 2026.

If they decide this is pure circumvention, the tariffs could be applied retroactively, meaning importers will have to pay a massive tax on solar cells that have already landed in America.

Walk through Hawassa Industrial Park today and you can see that regardless of how the U.S. rules, the physical infrastructure and the tech skills are already locked into our borders.