Sid,
Glad we agree on point#1 (Ballard's excellent management)
Point#2: you're missing the point. Without the D-B deal,
or something similar, Ballard would be footing the bill
for all fuel cell production themselves, i.e. revenue=ZIP,
cost=LOTS. "breakeven or tiny margins" is great. It sure
beats zero!
Point#3: Outsourcing is becoming more and more common,
esp. for new technologies, where it is clearly cheaper
for a company to leverage someone elses technology,
rather than pay for years of their own R&D. It also
allows the other co. to bring its product to market that
much faster. I expect there will be alternative technologies
as well, but if PEM turns out to be the technology of choice,
as I believe, it will be better for other co's to buy the
engines from the JV co. Pure economics - it is the cheaper
solution. Ballard's excellent management also knows the
dangers of having only one partner, so don't be surprised
if/when the other JV's with GM, etc. continue to grow.
So on this point we disagree. OK.
I do agree that this will bring other "green" technologies
more into focus, and is a boon for ERC and others like them.
Point#4: Your "suspicious coincidence" theory...I don't buy
it. The 2 co's agreed that D-B would buy 25% of Ballard, for
$35/share, and then had to set a value for the stack tech.
assets, facilities, personnel, etc., which they subtracted
from the price. Don't tell me that just because it worked
out to about $10/share, that it is somehow suspect, just
because the numbers are even. You've been watching too much
X-files.
You keep saying $25, so I can only conclude that you value
the stack tech. assets, facilities, personnel, etc. at $0.
Here too, we disagree.
Regarding Ballard's price, you say $25 is "a lot more than
the stock is worth." Well, that is your opinion, but it is not
shared by Daimler-Benz, or by Midland-Walwyn and Nesbitt-Burns
(the 2 highest ranked research depts. in Canada). That doesn't
make you wrong, but you are up against some extremely astute
market analysts. (My own opinion of Ballard was formed
independent of M-W, N-B, or any other analysts.)
Garth. |
