Saturday, July 19, 2008

Zenn Motor Valuation of $100/share?

Back in June, an article covering Zenn Motor appeared on several news sites and cited a $6.50/share "speculative buy" price target set by Versant Partners' Massimo Fiore who was also quoted as saying of EEStor, "This is not small potatoes here. If this works, it really changes the transportation sector."  

On Fri July 18, Fiore released a research update in which he presented a way of valuing Zenn's stock at $100/share if all goes well with EEStor, including $29/share based on Zenn's stake in EEStor and $71/share based on Zenn's main lines of business. His analysis included estimated annual revenue of EEStor in 2013 at $12.7Bil or $5.5Bil from transportation, $1.2Bil from charging stations, $3.2Bil from wind farms (Hello T. Boone Pickens), $1.2Bil from Solar PV power, $1Bil from misc load leveling, commercial and military applications. For Zenn operations, Fiore estimates 2013 revenues of $240Mil in low speed vehicles, $500Mil from highway capable vehicles, $1.2Bil from ZENNergy drive trains and $80Mil from retrofit conversions.  Before you start yelling at me and my brevity, get the full report yourself for $30 here

Obviously I had to talk to Massimo Fiore myself and did so this afternoon.  Among other things, Fiore told me "...people ask me 2 questions about Zenn and EEStor, the top two questions. Number one, is this thing going to work? I dont know the answer to that question. Number two, where is this thing going to go?  I can give them an idea or investment thesis of where it could go which is what I've laid out in my note. "   (BTW, he reads this blog --one of his colleagues pointed it out to him). :-)

If you follow EEStor news because you are invested in Zenn Motor, you may want to familiarize yourself with Fiore's work here because the potential for EEStor may  be much higher than he presents.  I'm sure there will be no shortage of comments on this posting. 

And since we're now re-entering the topic of how to invest in EEStor via Zenn Motors, we're going to throw it back to Tom Villars for an update on his own personal theory of Zenn Stock valuation.  Our goal is to post that article tonite.  (no tease intended--he's still editing it now).
By the way, if you think you have an article on any aspect of EEStor that deserves the spotlight, contact me and we can discuss posting it here.  We've got over 1000 people visiting the site/day now.  

32 comments:

Manthan said...

blah...

if eestor does not work they will go to 50 cents a stock or a dollar...

im sick of zenn's stock, i just want to see the capacitor come out!

Marcus said...

I kind of feel the same. It gives me an uneasy feeling, all this focus on potential stock prices -its just gambling. I don't like gambling much.

How about giving us an explanation for the Pirelli labs diagram? I am much more interested in the science.

Charles Barton said...

My suspicion is that if EEStor technology works, Feel Good (ZENN) will sell out toan auto company. ZENN lacks the production capacity to build millions of cars. ZENN's rights will be worth Billions to a big auto manufacture. That is why the EEStory is so compelling. It is hard to believe it is true, but if It is it would be worth biilions. ZENN is a Big-times speculative play.

Marcus said...

Just to add, I appreciate the work of financial analysts but for such a risky venture as this one there is just too much of a fantasy element. Seems more an exercise in creating hype than anything else.

Marcus said...

then again I guess hype is what attracts internet traffic and thus advertising revenue...

mrjerry said...

funny but B - is either on the numbers or off by two decimal points. Let face it, there not much in between. I invested conservative and just have some fun with it...

b said...

Charles, when I spoke to ian clifford, he told me zenn motors was a legacy project for his kids and for the planet. Selling out early would seem to me to be a very counterintuitive move given his self stated mission.

Regarding other comments above: I believe the science and the stock are tied for the lead in terms of interest in the eestor story which is echoed by massimo in his quote to me.

Also, my personal belief is that eestor's production capacity is scalable. To me, that means they could go to 100 or 1000 production lines as easily as they go to 8 or 16 lines. Cheers, b

mrjerry said...

Just thinking!!!
- Sept 2007 Permittivity Testing Internally Validated
- Nov 2007 - Al Gore Joins Kliener
- Jan 2008 - Lockheed signs exclusive agreement
- Jan 2008 - Topler Morton back in to eestor
- March 31st - Zenn announces CityZenn.
- April there a special meeting to inform investors of eestor plan, multiple production lines etc.
- April 16th Weirs first time since jan 2007 responds to questions about eestor (Christion Science Monitor).
- April 21st Kleiner/Rockport announces investment in ThinkCity and Plans to build north american plant.
- ThinkCity/CityZENN are schedule to be released the sametime 2009?
- ThinkCity is the only fully crash tested and ready to go electric veichle?
- If CityZENN eestor if not ready and needs further testing they will go with Li-on
- ThinkCity currently is ready with Li-on.
- May 1st Kleiner gets 1.2 billion in VC funding (500 million in mature green companies)
- May 30th - Zenn announces 15 million VC
- July - Al Gore says we need to move to a world of electric/10 years plan for non fossil fuellectric world
Questions/Etc.:
- Do you think Al Gore heard of eestor?
- Why did Kleiner buy a electric car with batteries a few weeks
after eestor meeting?
- EEstor has big plans on grid leveling, Al Gore has big plans on Grid changes? Could EEstor be the enabler?

richterm said...

I hate to see this forum focusing on Zenn's stock price also. Too much projection and speculation based on what we all really want to know - DOES IT WORK!?!??

If it works I'll be excited not only for myself but for the country and the world. I'd follow this story even if I had no Zenn investment.

That said, are you kidding me? If this works, by 2012, Eestor will be at least a $100B company. If Zenn has a 7% stake in that, back out Zenn's stock price before they sell a thing themselves.

(Of course they could sell out or dilute.)

Marcus said...

C'mon, what's up with the Pirelli diagram b??!!

b said...

Pirelli Diagram? As Dick Weir says almost 19 times every time I talk to him, "No Comment. Next question."

Marcus said...

Ok, so why aren't you free to explain? Can you at least tell us this much? You are a free agent are you not?

Tom Villars said...

marcus,

What do they do at Pirelli Labs? Maybe you can check out their website and let us know.

Marcus said...

They do R&D. Yes they could easily be the guys involved in permittivity testing. I'm just fishing for something, anything!

Marcus said...

Some of the R&D being a little way out, such as cold fusion....

Tom Villars said...

marcus,

R&D, hmmm... I wonder if any of the R&D overlaps with any of EEStor's patents.

Marcus said...

Probably unconnected but former Pirelli Tire CEO Gaetano Mannino has an association with ZAP.

steve said...

B,

You published this today, Monday
July 21, 2008... the post for the article date says it was published Saturday July 19th.

Maybe you should fix that just to keep things chronologically accurate.

It's also interesting to note that Fiore's original $6.50 buy rating for Zenn appears to have been based on Zenn sales if EESTOR doesn't work out, while the $100 per share price of Zenn includes the whole enchilada. Just taking that from Fiore's caption:

We maintain our Speculative BUY rating and target price of $6.50 based on DCF (17.5% WACC), 7.1× EV/EBITDA (2012E) and 0.9× EV/Sales (2012E). On the other hand, we offer an alternate valuation perspective where we envision a target price of several times its current quote based...

http://reports.finance.yahoo.com/w0?r=42906141:2

Furthermore, seems like people are stamping their feet and whining about not having total confirmation. EEstor doesn't owe you jack. When their intellectual property is locked down and they feel the time is right they will roll it out. Until then, be happy you know anything. Nobody is forcing anybody to read this blog.

Thanks to B for doing the work. People ought to appreciate anything useful that's also for free. Last time I checked, there's no fee charged for accessing this blog.

Geez, you only get what you give.

taa said...

mrjerry,

I think your time line is right on!

erkyl said...

Gee, I wish everybody would calm down when Zenn's stock price is discussed. It's enjoyable for some of us to talk about. We weren't around when Xerox and IBM were started. It would be great fun to see my little $10K investment in Zenn to go to $200K. But I'm much more interested in seeing OPEC's business going down the tubes over a decade and a half or so. I will revel in the news stories about the plummeting demand for crude. The traders will sell it down mercilessly. "Oil hit a fifty year low today as electric vehicles capture a greater and greater share of the automotive market..." This will be stone cold blast. How about back stories on Discover Channel on how they go about scrapping a super tanker and how they re-use all the steel with a scene at the end of seven or eight tankers moored at the dismantling facility. If Eestor works, in 15 years, you'll have to drive across town to one of the ramaining gas stations for gasoline for your classic car or motorcycle. Imagine. And the best part... it's back to the sand for OPEC. All this sweeter than any trade could ever be.

Tom Villars said...

queue Master Card Priceless commercial theme song

cost of reading this blog = 0$

$10,000 of ZNN in 2012 = $1,000,000

Hugo Chávez on TV accusing EEStor of being a CIA plot to destabilize Venezuela = priceless

richterm said...

erkyl - I'm with you bro. Maybe they can make some nice glass out of all that sand.

mrjerry - you left out Mccaon's battery bounty..

"the size, capacity, cost and power to leapfrog the commercially available plug-in hybrids or electric cars.”

He said the winner should deliver power at 30 percent of current costs.

I wonder where he got those specs from.

Sounds like someone tipped him that this was about to break, and he's angling to look "visionary".

Marcus said...

You guys should get paid for this. I guess if I buy you will be. Now I've gotta find a broker. What a distraction.

mrjerry said...

eestor web page: Now and the future

home page - 3 min video al gore talks about how he worked with richard weir 12 years ago, they created a new electrical energy storage unit, called eesu.

10 years later we no longer generate electricity from fossil fuel, al gore is now know as father of electricity and the internet.

15 years later al gore has save the planet, we just call him God.. also owns 25% of google/eestor/world infrastructure

richterm said...

Since this is a Zenn stock price thread, I'll add my thoughts. I think the analyst is trying to illustrate the upside, but cannot bring himself to lay out the true potential of Eestor. I think he's afraind of not being taken seriously.

He's giving Zenn $29/share for Zenn's stake in Eestor. Assuming he's using Zenn's current 3.8% stake, he's valuing Eestor at about $25.5 Billion. Please. That's less than 1/4 the market cap of Intel. For something that may make OIL obsolete?

Based on my earlier somewhat conservative estimate of Eestor getting to a market cap of $100B, and Zenn upping their stake to 7%, that gives Zenn $200/share just for that equity position.

Clearly this is all speculation but does anyone think I'm being wildly optimistic?

Tom Villars said...

richterm,

I think the 7% figure to much. ZENN will shortly have 6.2% as explained in their 2008Q2 report But even this is to high as EEStor will have dilute their shares when they go public as well as when the need to raise additional capital for expansion. My guess is 4-5%. But even at only 3.5% that would still give a ZENN share price $100.

Marcus said...

But what about the question of how long the patents are really going to be effective for? China for example will be trying its hardest to copy the technology ASAP. As argued in the past, if the patents are anything like that earlier patent they will be close to worthless since little variations will be upheld. I can see an initial big impact but over the long term other players will enter the fray and the theoretical value that assumes no serious competition, will never be reached.

richterm said...

tom - my mistake, I thought it was closer to 7% so I used that as a round number.

Anyway, once Zenn owns 6.2%, they own 6.2%. Eestor going public should not affect that at all. If Eestor goes public, they issue shares in the quantity/price that the IPO values the company at. Zenn gets 6.2% of those shares. Later Eestor could issue more shares to dilute everyone, but that shouldn't happen immediately. Maybe it never happens.

richterm said...

marcus - that's way down on my list of concerns. I trust Eestor and Kleiner will be smart enough to protect their IP. They'll have this tech out there for years before someone else can compete. By then I hope we're all very happy with this investment.

If Eestor comes out with this, the IPO and following frenzy will be insane.

jman said...

Since this thread is about potential stock prices...


Anyone have any thoughts about a more conservative route with LMT shares?

ApplewoodCourt said...

Regarding LMT - LMT has an existing market cap of $44 BILLION, until they would have to start selling a lot of product before making a dent in the share price. I'm an amateur investor, so take my opinion for what it's worth.

ankur said...

Well I am finding it little risky for investing in EEStor .


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