Sorry, Turbodyne may be on your list of most interesting public companies but it's not on mine. I'm willing to spend an hour of my time pulling easily accessed public file material -- particularly if there's any possibility that the company's Russian connections (the "TransBusiness Group of Moscow"?) may cross over into more intriguing territory -- but it's up to all those with a stake in TRBD to go further with independent due diligence into the company.
As far as Manuel Asensio goes -- he holds much less interest to me than people like Nick Masee and his wife, Lisa, or Leon Nowek et al. As far as I can see, a day or so after on-line (and Fortune) writer Herb Greenberg questioned Turbodyne's affairs -- drawing upon news coverage that's been on the public record in Canada for years (see article below) -- Asensio issued a short sell recommendation on the company's stock. There's a world of shorts and longs out there, and that's not a game I care about.
My point of visitation -- drawn by the YBM Magnex posts here -- was that you all, presumably, know about Turbodyne's history of unfulfilled promises and questionable disclosure (who could forget the "Granatelli" legerdemain?), but people outside of Vancouver may not be aware of the background of TRBD principal Leon Nowek, the Northfork scam and other entertaining facts. If you want to know -- my posts point out some public record due diligence sources.
I wish you all the best, in this, and any other stock plays with which you become involved. This medium can be an invaluable tool for learning from others. You just have to keep your ears -- and mind -- open.
FWIW, here's the Greenberg column that appears to have kicked off this week's events:
Herb on TheStreet: Turbodyne Technologies: Will Its Vancouver Past Cloud the Future?
By Herb Greenberg
Senior Columnist
8/3/98 10:19 AM ET
Keep an eye on: Since February the stock of Turbodyne Technologies
(TRBD:Nasdaq), which until a year ago was listed on the Vancouver Stock Exchange, has leapt 750%. Many of its investors were German. On Friday, alone, the stock added 6%, or 1 point, to close at a new high of 17. The Woodland Hills, Calif., company has no earnings and, with a market value of $509 million, trades at a robust 10 times sales.
Another Internet company, right?
Nah, better. Auto, truck and bus parts. Most of Turbodyne's current revs come from the business of making private-label aluminum wheels for cars -- a mundane, low-margin business. The sizzle, if you can call it that, is with its supercharged Turbopac pollution control devices that the company has been working on for what seems like forever. Earlier this year Turbopac received EPA certification, and the company recently struck a deal for Detroit Diesel, an engine maker, to market Turbopac in the U.S. The company says it expects at least 2,600 will be sold in the U.S. for use in buses, alone, this year.
But the big news is a contract to sell 10,500 units to the TransBusiness Group of Moscow for $30.6 million, with delivery expected within 12 months. That's a huge contract for a company Turbodyne's size. How can it guarantee the Russians will pay? Turbodyne Vice Chairman Leon Nowek says the United Nations is acting as an intermediary with the World Bank and banks in other countries.
Adding punch to the story: Turbodyne recently announced it's in
"preliminary" discussions for a strategic alliance or selling a minority interest in the company to one or more "industrial concerns."
Petty impressive until you take a look at Turbodyne's background. The
company evolved from a Vancouver Stock Exchange shell called Clear View Ventures, which was run by Nowek.
As far back as 1994, according to an extensive story in the Vancouver Sun, Nowek and Turbodyne Chairman Edward Halimi had been forecasting that 10,000 Turbodyne emission control units would be produced by year-end. "That was the first of many releases in which Halimi asserted that production was just around the corner, that major auto manufacturers were keenly interested in the product and purchase orders were imminent," wrote the Sun.
Another big splash: In June 1996, according to the Sun, Halimi said
Granatelli Performance Technologies had agreed to buy a minimum of 15,000 units in 1996 at $9.4 million, and 50,000 units at $31.3 million in each subsequent year. As it turns out, according to the Sun, Granatelli had sold only 125 units for about $75,000. The Granatelli deal, the Sun said, was a major selling point for a $7.5 million private placement of warrants.
Nowek told me the company no longer has a relationship with Granatelli, which changed its name to Grand following controversies that it was trying to capitalize on the name of race car driver Andy Granatelli, who was not associated with the company.
Fast forward to today: Nowek says Turbodyne will start showing a profit from its Turbopacs by year-end. As for its high multiples, Nowek cites Turbodyne's "breakthrough technology," and says: "It'll be quite a while before you could relate normal automotive-type margins to Turbodyne's revenues."
He had better hope the company's investors agree, because the typical auto parts stock trades at half sales. For Turbodyne, that would amount to around 75 cents per share.
Herb Greenberg writes daily for TheStreet.com. In keeping with the editorial policy of TSC, he does not own or short individual stocks. He also does not invest in hedge funds or any other private investment partnership. He welcomes your feedback at herb@thestreet.com. Greenberg also writes the monthly "Against the Grain" column for Fortune.
c 1997 TheStreet.com, All Rights Reserved.
P.S. If you really don't want me visiting this thread, all you have to do is stop posting messages to me, or mentioning my name, or that of YBM -- so when I do a word search on SI I won't keep being drawn back! See ya... |
