Thursday, July 31, 2008

Stock Talk

















I wanted to start a thread here on the stock movement today. Anyone care to post some analysis or theories about what happened, will happen, might happen, etc?

Also, on a related note, Ive been curious and others have emailed me wondering to what degree it's possible to learn what institutional investors may be invested in Zenn. Any way of learning that through proper channels? Also, does anyone recommend a stock quote embedding widget? I've tried to add one here previously but could never find one that looked good.

Note: for this thread, I'm going to make sure it stays on topic by removing posts that may have better life elsewhere on the blog. Warning complete. -thanks!

UPDATE: within the comments thread, we have this link to a clip that aired this evening on BNN. Good discussion about Zenn's upside potential if EEStor pans out with a rarely recognized reality that even if it doesn't, Zenn has some downside protection.

58 comments:

Marc said...

You all might want to try this site for up to the minute quotes.

Thanks for all the good info, this site stays on topic thanks again

Marc

http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=ZNN.V

nekote said...

which website? EEStor.com ?

TSX for ZNN

today's action:

Last: Change: Volume: 3:58 PM ET
5.830 +0.340 (6.19%) 546,059 July 31, 2008

Avg Volume: 132,600

So, today was 4 times the Avg Volume

Marc said...

This site is a Business Week site and it does appear as if the volume today was over the top. I have the feelign that someone put in a market order and he was taken to the proverbial cleaners which can happen in these type of markets. Five minutes before the close the sp was at 5.93 and within five minutes on just a thousand shares or so it dropped .10 intereting ride today.

Marc

Anonymous said...

ZENN was discussed on BNN ( Canadian Business TV - kinda like CNBC with accents ) today at about 11AM in a segment called stars and dogs. It was I guess a star. you can see the segment at www.bnn.ca

Anonymous said...

Looking at a chart of todays trading it looks as though some large trades began to happen around 11:30 (10k - 20k shares) it didn't take long for the price to start moving up but as the price was moving up you'll notice that the lot sizes were smaller (1k - 10k) my guess would be that these were the day traders pushing up the price as they believed it would continue up.
My guess as to why it changed direction was either some investors figured it moved to far to soon and so started to sell or short the stock or secondly maybe some of the big investors earlier in the day were happy to sell at approximately a 15% profit. I would have gladly sold some up there but hindsight is 20/20 and I think it won't be long till the price is up there again.

Jeff

sds said...

Google shows today's volume 546K.
I think there is a bigger fish in the waters. There are number of transaction for 20K and even 36K.

That what was driving the price.
Somebody mentioned pension and scientific funds wanted to get a stake.
I expect the volatility will escalate.

nekote said...

The "float" is very thin?

How much stock do insiders own?
A lot more than 50%?

26.898 million shares out
C$5.83 Last today
Market Cap = C$156.815 million

Hollywood conspiracy movie scenario:
Shouldn't GM or Saudia Arabia or such buy the damn thing to "Kill the Electric Car"? :)

Anonymous said...

from bloomberg:
mutual fund holders include
AGF funds
London Life
Mavrix
Harmony
GWL ( Great West Life )
all Canadian mutual fund companies/insurance

TomBfromLouisiana said...

when I purchased Zenn I could not buy znn.v but had to buy znnmf. Is there a difference?

Anonymous said...

http://watch.bnn.ca/stars--dogs/july-2008/stars-and-dogs-july-30-2008/#clip70607

is the clip from BNN. forward to the 6min 01 sec area. listen to Kim talk about her 'killer blow' reason for ZNN. Versant Partners Institutional equity research says ZNN could be 100$/share on permitivity and that ZNN is an obvious takeover candidate because a buyer would want the exclusive use license Zenn has now.

Tom Villars said...

There was a misleading post from Earth2Tech.com published last night that may have triggered some panic buying.

It says,

Electric car maker ZENN Motor Cars invested $2.5 million in EEStor in 2007 for a 3.8 percent stake in the company, putting EEStor’s estimated equity valuation at the time at some $66 million. ZENN has the exclusive rights to use EEStor’s technology in new vehicles weighing up to 1,400 kilos, as well as for retrofits. In the wake of EEStor’s recent technical verification, ZENN has the option to invest an additional $5 million.

Obviously third party verification of permittivity has NOT been announced so once people realized the mistake, the price peaked and headed back down.

But who knows, may be it was a butterfly flapping its wings in China that caused the run up and then pull back. This stock is going to be a roller coaster for the next 12 months so buckle up.

Anonymous said...

Hello

You probably have to bear with me as I'm not a native speaker.

I have the impression that someone is trying to put a ceiling on Zenn stock. If the website shortsqueeze.com is right short interest in Zenn went up considerably (Type in the US Symbol) It looks like only when interest becomes too strong like it has been the case periodically today the shortening party has to let it flow.

I think it is possible that a prospective investor in EEstor (we heard about financial institutions being in contact with Weir) has an interest to cap Zenn stock in order to be in a better negotiating position. Zenn stock price is one way to measure the value of EEstor. There are certainly other more appropriate measures but this could have an influence. Negotiations should start soon.

In his last interview Weir mentioned:

"Weir wouldn't disclose if EEStor is working with any other companies, saying only, "Once contracts are signed, I'm sure we'll have a news release on them." "

What do people here think?

nekote said...

Sorry to insert somewhat of a non-sequitor.

While looking for that BNN segment anonymous referred to (later provided a perfect link - thanks!).

Came across an earlier BNN TV interview.
Ian Clifford on BNN:
(fast forward to about 3:50)
Ian Clifford, June 9, 2008
about 5 1/2 minutes long

Nothing that hasn't appeared here, IMHO.

But, there are the particular words Mr. Clifford chose and how he said them. Maybe someone interested / skilled in analyzing delivery / body language could clue us in?

nekote said...

link to anonymous' squeeze.com reference:
Short interest in ZNNMF

Zenn Motor Company Inc. $ 5.38
ZNNMF 0.00

Short Interest (Shares Short) 464,800
Days To Cover (Short Interest Ratio) 9.0
Short Percent of Float %
Short Interest - Prior 185,000
Short % Increase / Decrease 151.24 %
Short Squeeze Ranking™

% From 52-Wk High ($ 6.73 ) -25.13 %
% From 52-Wk Low ($ 2.64 ) 50.90 %
% From 200-Day MA ($ 4.24 ) 21.15 %
% From 50-Day MA ($ 5.22 ) 2.92 %
Price % Change (52-Week) 24.30 %

Shares Float
Total Shares Outstanding
% Owned by Insiders %
% Owned by Institutions %
Market Cap. $
Trading Volume - Today 0
Trading Volume - Average 51,400
Trading Volume - Today vs. Average 0.00 %
Earnings Per Share
PE Ratio
Record Date 2008-JulB

Tom Villars said...

I don't put a lot of weight into the theory there is some "evil" purpose behind the run up in short interest. A lot of times this is just a way to lock in a profit when you don't want to sell shares you currently own because of tax reasons or you are prohibited by from selling for a certain time period.

Gunnar said...

I should have posted with my correct name. So it's Gunnar from Germany.

I doubt that someone is shortselling Zenn because he knows the technology will not work. It can not be. I am trying to find an explanation.

Good night (0.30 over here)

Anonymous said...

I am getting the feeling this technology could devastate the US auto industry. If there is a bidding war for ZENN following the announcment of permitivity, there is not a auto maker that could outbid Toyota.
I cant imagine a company trying to compete with the specs of an all electric toyota with EEstor specs. Surely the technology would then be assimilated into the an entire line of electric vehicles.

Bretspot said...

Me? I just want to grab one of those batteries, and convert my 98 Corolla to electric ASAP! :)

Tom Villars said...
This comment has been removed by the author.
OntarioInvestor said...

This is another reason for the drive up in the stock price today. This is from Canada's Business News Network station "BNN". Take a look about their comments on Zenn & EESTor.

http://watch.bnn.ca/wednesday/#clip70607

zawy said...

If EEStor succeeds, it will be the most important and most successful company of all time. Hotbot and altavista were nearly as Google and the internet would have done fine without it. The exponential trend indicates it is already time for someone to replace Google as top dog. I thought it was going to be nanosolar or a group of thin-film solars, but solar and wind will go twice as far and twice as fast with the EESU.

An EV powered by EESU and solar cells will cost only $2.5 per gallon-equivalent for the installed solar cell energy with a DC system charging a second EESU system during the day (no battery or converter costs for the solar cells). This takes into account a 7% loan rolled into a tax-deductible mortgage. It will save a 2-car household $2,000 / year in fuel costs.

Speculating on the motivations of traders behind Zenn stock moves (up and down today and nothing yesterday) is an "interesting" use of time.

The larger volume indicates people are taking notice. That it took a full day for them to take more notice indicates they were not looking directly at Zenn, but depending on other indirect news. The slight move upward, not even reaching the highest % gain, peak, nor the volume of the past 30 days tells me the stock will stay even until more news is out. However, the last news a month ago took 5 days for it to reach the real peak. Short-timers might want to hold until monday afternoon. Tomorrow could still be good. THe peak at 15% today was easy to see, but the retrace to 7% was a little more than i expected.

Tom Villars said...

If a big OEM is able to buy ZENN, then I agree things would look pretty bleak for all the other big manufactures. But I don't think Ian is interested in selling and besides these big companies will not be able to move fast enough. If someone offered 2 billion for ZENN tomorrow, the board might recommend the the offer. By the time everyone starts to realize what EEStor can do, if will be ZENN making an offer for to buy GM and not the other way around.

My guess is ZENN will become the Intel of the automotive industry selling to anyone willing to buy.

Book-em-Dano said...

Satya - You said:

Development of the line has taken R. Weir 7 or 8 years even after he knew it would work. What is it that can be started between now and what looks like imminent commercial operation?

-------------------------------

I can't imagine that most of the possible competitors would be only starting that process now. I'm sure many of them have been at it for years, both through independant discovery of the same or similar tech, or through getting tantalizing info - some from EEStor - going back for years.

Also, it might be prudent to remember that "possible competitor" could mean anything from a small, hi-tech, private sector stealth startup here in North America, all the way to national government labs backed by billions in taxes. China comes to mind.

On a seperate note, I personally wouldn't assume that the whole 7 or 8 years was taken up by EEStor "developing the line", per se. Maybe the last 4 or 5? Hard to say. As for this being the "real milestone", I doubt that very much. I believe it is a critical incremental milestone, but I believe the "real" milestone will be tweaking and tuning the line(s) to the point where throughput is acceptable AND yield enables an acceptable price point for the product. There have been instances in the past where scaling up a new technology for production failed, with scientists and engineers running around chasing ghosts for a year, unable to figure out the problem, and the plant finally abandoned. It happens.

There are also other possible problems that need to be addressed that have nothing to do with technical or manufacturing details. Security, for instance. Of the 5% reservation I have about EEStor's ultimate success, sabotage is the biggest concern. I'm hoping (not guessing, I haven't a clue about this one) that the military/feds are helping with this issue. My 3rd biggest issue is regulatory certification of their product itself, regardless of separate approval of other products it's used in. My 2nd biggest concern, ironically enough, is with how truly big and disruptive this product may be. I'm sure EEStor has thought of this and are handling it with due caution, but if they don't, there is the possibility of the feds introducing regulation on the entire industry itself. And if it's as destabilizing as I believe it COULD be if not handled properly, the feds may feel forced, under emergency powers legislation, to completely nationalize the industry to restore order and stability to a chaotic, crashing economy.

A lot of people use the phrase "game changing" and "revolutionary", well this the kind of stuff that often happens during a revolution. Past a certain point, the feds WILL step in to restore stability. Or control a "strategic technology". Whatever.

Anyway, those are my top 3 concerns at the moment. Is there anything else that has occured to you that I might be missing? I think I am missing something, only because I usually do.

Dan

P.S. If anyone would like to continue this off-blog:

daniel_r_plante@hotmail.com


**********************************

Moomipappa said:

"Why is no one talking about buying Lockheed shares?"

----------------------------------

Personally, I can't afford the minimum 100-share cost, or I would. I agree with your point though, and have tried to start discussions centered around LMC specifically, and military applications and scope in general, but they seem to fizzle out. It's difficult to get people involved in reasoned speculation of all the implications, even just to the point of having a rational basis to predict valuation, let alone an empassioned exploration of what ZENN's and EEStor's efforts could mean to our kids and even our own future quality of life. (shrug).

Dan

nekote said...

Lockheed Martin - LMT
396.35 million shares outstanding
104.33 closing price
41.35 Billion market cap
90% Institution Owned

ZENN - ZNN.V
29.38 million shares outstanding
5.83 closing price
171.29 million market cap
minimal Institutional Ownership

Which gets the *greater* *percentage* increase, per dollar invested, if EEStor works out?

Anonymous said...

Kim on the BNN video clip quotes the Versant research piece incorrectly. The target for ZNN once permitivity is verified is 20 times not $20. The analyst target is $100 per share. BTW - Versant is an institutional only boutique, and has not been part of any ZENN financings to date. The report breaks down the value of the EEStor license held, the EEStor equity stake and the low speed car business as well.
research available on bloomberg.

Tom Villars said...

nekote,

Take a look at section 2.b) Military in this post where I ran some numbers for the military implications if EEStor technology works as advertised.

The energy market is a USD $4 trillion business where EEStor and ZENN can be major players. World military spending is only about $900 billion and EEStor is at best a niche player. Lockheed will undoubtedly get some interesting contracts using EEStor technology but we are looking at increases of 10% not ZENN's potential 1000% increase as suggest by Versant Partners' Massimo Fiore.

Anonymous said...

Short Interest report on US Pink sheet symbol not valid. The symbol was created by US dealers to comply with NASD requirements for trade reporting only. When us clients buy the stock using the pink sheet quote, in US$, the us dealer get the shares by buying in $C on the venture exchange. Until settlement, the us trade is a technical, but not actual, short until settlement date. The real short interest is reported by the venture exchange every 2 weeks, and last report was 1100 shares. Also, since ZENN has not got a 'blue sky' registration for their shares, US clients will continue to have difficulty buying shares, and US dealers can not recommend the stock. That all changes if ZENN moves trading of the ZNN shares to the TSX main board. This moves gives ZNN automatic blue sky registration in the US. The recent $15M financing completed by ZENN gives them the resources to qualify and step up to the TSX.

W

nekote said...

hey W,

Thanks a boat load that post!!!

Virtually all of the "Short sales" are an accounting illusion.

That clears a ton of FUD!

Who knew!

Tom Villars said...

W,

I wondered how that worked with the pinksheets. Thanks.

So the shorts listed here are actually the US net buys over the time it takes to settle?.

Also is there any way to track if ZENN has requested for listing on the TSX main board? How long does it typically take once a company makes the request?

Anonymous said...

watch the level 2 trading in the morning on ZNN - you can see the broker numbers of the buying brokers. recently they are mostly small, and mostly from the known name discount brokers like etrade and waterhouse. those are the retail buyers who read these blogs!

w

Anonymous said...

company applying for listing are not allowed to say they have applied. There is a process described quite well on the tsx web site about stepping up from the venture. a very common occurance. what is not common is companies with market capitalization like ZENN staying on the venture.

W

Y_Po said...
This comment has been removed by the author.
Y_Po said...

Can somebody explain to idiots like me what are the problems with trading ZNN in USA specifically short sell? Not that I am going to do that.

TomBfromLouisiana said...

Yes, please I just bought shares in znnmf in the USA. How is that different than buying on the Canadian exchange?

nekote said...

W,

level 2 ? Way over most of our heads, I think.

Can you explain?
Provide a web accessible URL?

Or, is that "level 2" type of info not directly available to the public?

Anonymous said...

What is the postion for current share holders if Zenn goes to the TSX main board?

Ian Clifford has also mentioned a desire to list Zenn south of the border. What happens then to sharholders....does the stock dilute...what is the mechanism?

Bill300 said...

Like many of you I have been awaiting the announcement of permitivity test results. I would offer the following as a reason they have not and will not be forthcoming.

Zenn gains the ability to increase their percentage share of ownership from 3.8% to 6.2% with a small additional investment of $2.0 million. This comes even after the other investors, including Kleiner, opt-in for their partial anti-dilutive investments.

This percentage increase that Zenn achieves HAS to come out of the percentage ownership positions of the other shareholders as a group. It will be dilutive to them. The Zenn contract is without a doubt very specific with regard to the event that gives them the ability to make the additional investment. If there is no permittivity test result, then no additional dilution to Kleiner, et al.

This blog has a reference to Kleiner wanting Weir to 'take Zenn out' of Eestor's ownership. Apparently, Weir has some loyalty to his early investor and did not accept Kleiner's scheme. Kleiner has no such loyalty, except to themselves. If they know it works, what is the point?

There really doesn't seem to be much for Eestor to gain with a test result. They are private and can probably raise money on much more favorable terms than the Zenn option. Perhaps EEstor got a very favorable bridge loan fron Kleiner to skip the permittivity testing? If they produce the ESU and it works as described by Wier and Zenn, doesn't that provide all the proof anyone needs?

I wouldn't hold my breath waiting for permitivity. I will be very surprised if Kleiner is.

richterm said...

If Eestor delivers, there will be a nice runup from the current price. After that, the waters are filled with sharks and who knows how this plays. My biggest "fear" at that point would be a hostile takeover (Ian doesn't have to agree to sell) for less than fair value.

I'd like to see the Zenn boad adopt some "poison pill" measures to prevent hostile takeover. They could be gobbled up by ANYONE for a couple BIL (as someone mentioned, an Oil company), and while Zenn holders would make some quick cash, it would be missed potential.

Bill300 said...

Richterm,

I share your concern. The insiders only control 16%.

nekote said...

How is 16% insider ownership known?
Gotta' URL / documentation?
(I don't remember seeing that, before).

The other 84% now owned by outside investors who've come up with the additional funds for ZENN to buy the equity stake in EEStor? Know who they are?

And the recent (May 30) additional $15M funding?

ZENN ownership getting diluted, so founders are down to 16%?

Bill300 said...

Nekote,

Aha! So you are another "investor" who fails to do the fundamental research of reading the annual report. Shame on you! ;)

From the annual report, dated 1/21/08:
"As the date of this report, the directors and senior officers of the Company beneficially owned, directly or indirectly, or exercised control or direction over approximately 16% of the number of outstanding common shares of the Company."

http://www.zenncars.com/media/documents/Annual_Information_Form_Jan_21_2008.pdf see page 20

The annual report also discloses that their 3.8% could become diluted.

nekote said...

bill300,

Not an investor.
Yet.

Guilty, as charged.

Guess this is part of my DD effort! :)

Thanks.

OntarioInvestor said...

Regarding two of the investment questions from earlier:

(1) when a typical investor invests, they see the level 1 pricing, which would include the current bid (what someone is willing to pay for the stock), the current sell (what someone is willing to sell the stock for), and the last price it traded it, the volume. A Level 2 trader (you pay more for this), gets to see all the current bids/sells, etc, so you get a better overall feel for the amount/volumes that are being traded on a stock (you can see large players coming into the volume).

(2)As for what will happen when the stock goes to the TSX (main exchange; currently it is on the TSX-venture), your current share ownership will not change (you will still own the same shares/value...etc), but what happens is that a lot of mutual/pension funds will now be allowed to buy the stock in their portfolios, as some funds are only allowed to purchase TSX listed stocks. When an investor buys a certain type of mutual fund, they are guranteed that the fund manager will pick a certain grouping of stocks(might be an oil index, or a financial index, or a requirement might be that they can only buy TSX main board listed stocks). In a nutshell, what usually happens is the stock price appreciates considerably when moved up to the main board, because their is a larger pool of money managers that can purchase the stock, in much greater volumes.

I would put good money that ZNN is very close to listing on the TSX, as they currently meet all the requirements, and the market is demanding it through the volume increases.

For those that are just getting into investing, i would recommend invetopedia.com. they area amercentric based but the info is transferable.

Hope this helps.

nekote said...

Very sincerest thanks to all who spend the time and effort to increase (my!) knowledge base!

Just a tiny payback.
That "invetopedia.com" missed an s.
InvestoPedia

Again, many thanks, to all!

OntarioInvestor said...

Good article on a possible EEstor/GM partnership. i believe that is the way this thing is going to play out...with royalties to Zenn, or a buyout.

http://tech.blorge.com/Structure:%20/2008/07/31/chevy-volts-batteries-cowering-as-eestors-supercapacitor-progresses/

Satya51 said...

Ontarioinvestor (or others)
"royalties to Zenn, or a buyout," This makes the most sense to me also. Somewhere I read that the City Zenn is primarily a showcase, demonstrating the working powertrain. Which do you think is better, royalties or buyout? Should a buyout be a worry for Eestor? I wonder if there is a plan?

zawy said...

Is Zenn *required* to wait on permittivity testing? It was my understanding that Zenn may decide or not to increase their stake after the permittivity tests for a locked-in low price of $2M, but that does not mean they are required to wait on the testing, therefore KP couldn't benefit from delaying the tests. This recent press release and the phone call with Richard indicates everyone involved is ready to let all cats out of the bag for PR/Press reasons to build excitement and acquire partners to give the partners time to compete for the rights, plan, and ramp up.

OntarioInvestor said...

Permitivity milestone: There really isn't any way to speculate on whether or not Zenn can increase their investment prior to permittivity. It would all depend on the wording of the contract. I don't think Zenn would have to issue a press release concerning whether the investment took place, but it would show up in the 1/4 statements which are due out for Jun/08, at the end of this month (providing the investment took place earlier than Jun/30). Either way Clifford would provide an update at that time.

As to the other question, i would think royalties are definitely the better way to go, way more potential, but sorry to say the most likely result would be a buyout. The concensus seems to be on permittivity the stock would be worth approx 20-25 per share. It's hard to say how the market would react if an buyout offer of say 30-35 a share came out. I would hope they would hold out realizeing it would be worth much more long term, but who knows.

Anonymous said...

call options are not available for Zenn?

erkyl said...

Well, I think we can all see that this stock defies conventional analysis. It's like playing chess next to an atomic bomb. If the bomb goes off, everything you thought you might have known about the game changes significantly. Such a formidable variable makes all our normal thinking meaningless, or nearly so. Although the market direction for Zenn if EESTOR comes through is "way up", remember, Zenn's excusivity only goes up to cars about the size of a Camry, so you might just see the majors going around Zenn straight to EESTOR and building bigger cars. I see a whole bunch of new cars from GM, Toyota, etc. that are one pound over Zenn's weight limit. Still, what Zenn does have an exlusive on would still be worth quite a bit in a takeover. If EESTOR does not come through, then Zenn is a penny stock. Whatever we have invested, we will lose as it gaps down to less than a dollar. Hopefully, there will be a period of losing faith in EESTOR where the price will slide over weeks giving us the ability to exit more gracefully.

ackkk said...

Thank you Nullpointer0.

I have attempted to start this conversation 2 or 3 times to little avail. I have not been able to understand this press release for the reasons you describe.

Meanwhile the tone here is growing decidedly more optimistic; although it still seems no knowledgeable person has been able to make the science work.

ackkk said...

Need Help!!

Looking for NullPointer0!
Replied to a post of his and can't find a trace of the original post. Maybe I posted on the wrong thread (among the myriad.)
Can somebody help me locate this poster?

AC

NullPointer0 said...

I don't see my post either. Perhaps our anonymous blogger host deleted it? You can read the post here: http://finance.google.ca/group/google.finance.709339/browse_thread/thread/df636150511dfc10

ackkk said...

Hey Nullpointer0,

How did you get your name?

ackkk

richterm said...

" I see a whole bunch of new cars from GM, Toyota, etc. that are one pound over Zenn's weight limit. "

I agree, many cars companies will be able to get around Zenn. That's why I always wonder why people ask why Eestor "sold out" so cheaply to Zenn. Zenn bought a valuable rights agreement, but Eestor really gave up nothing! They got venture capital, and all the rights mean is that Zenn will be able to make money off of the big car manufactureres in the small/mid market. Eestor can still make/sell EESUs for these units or license to the actual manufacturer, and make oodles of $$ off of them.

Bill300 said...

I pulled the EESTOR Stock Purchase Agreement from the SEDAR (Canadian SEC) filings site that covers Zenn's investment and the only way that Zenn gets to invest the $2M is when EESTOR delivers a permittivity test result of 18,500. I guess the 18,500 is some standard measure of permittivity. There was no additional description of the term or its measure.

So, no test result, no investment.

TomBfromLouisiana said...

It is a win-win deal for Zenn. They make money selling the new cars under the specified weight limit AND they have a passive, but solid, investment in EEstor on their other sales.

Will said...

Sunday Evening I was talking to a broker at etrade and he said there were indications ZNNMF would move from OTC market to NASDAQ stock exchange. Has anyone else heard this?