Dennis: So the Chicago buses aren't working yet? Michael and Hawkeye seem to think that they are.
I couldn't agree more--DB/Ballard losing money on the cars for several years after they hit the market is absolutely standard practice, and a necessity to get them accepted. I was arguing exactly that point several months ago, and everyone here attacked me. My point was that substantial profits for Ballard were not likely for at least 10 years at the earliest; wishful thinkers here wanted to believe that they would be wildly profitable from the word go.
It is funny how investors in development stage companies tend to fall in love with them individually, and don't ever think to make comparisons between them.
I am long a few biotechs, where people often post "Why should anyone buy this now, when their main product won't be on the market for three years, and not profitable for the first year after that?" These get a small market cap, because one must wait so long for profitability.
Yet Ballard has a market cap of about $1.5 billion, and it won't show much black ink, or any, for ten years. (Yes, I know buses might be on the market before cars, but that market is tiny in comparison.) And I don't think $1.5 bil. takes into account the substantial risk (I feel at least 50%, but that is obviously just a guess) that DB will abandon the project along the way, on the grounds that gas/electric hybrid technology accomplishes the same end, doesn't require any change in the world's infrastructure, and is orders of magnitude cheaper. It is quite amusing. |
