Taking stock of BLD
Posted on April 24, 2006
Filed Under Business |
Something smells bad here. I’ve been tracking Ballard Power Systems, BLD, for almost a year now. Despite a gradual run-up from $5 to $9 over the past 4 months, it is all speculative because the company has yet to turn a profit. But a change at the top and in its business strategy (from auto power plants to electicity co-generation) has sparked the change… but in the past 5 days it has popped over $5, closing today at $14.20 (intraday high of $14.92). “Well oil prices have reached a new recent high of $75″ you say… That is some speculation on a company that will still have a loss when it reports on Wednesday, and is only selling a handful of units. But the thing that does not look right is the fact that trading volumes since April 18 have been well above average, peaking today with 10x the usual volume. Did someone let some details out of the bag early, or are the speculators prepared for a hard fall on Wednesday?
I hope to see BLD turn a profit and expand its product line to include distributed power generation to every home and automobile. But that is a long time to come, and so is when it will turn a profit. Maybe after some years of solid growth, then it will be a good long-term investment.
Update 2006-04-26: Man did I call this one… Today BLD lost $3.04, -21.41%, and was downgraded to SELL by Citigroup. Volume was even higher today, over 2M shares on 6505 trades (avg of about 300 shares a trade).
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