Derrick: Those were excellent suggestions, but only Yahoo and Amazon have a larger market cap than Ballard. Excite, Lycos, Infoseek and everybody else in the internet world have a smaller market cap than Ballard's present US $1.6 billion.
Even Amazon may not be as highly valued as Ballard, when you take into account the fact that Amazon's shareholders will someday get 100% of any profits that it has (if it ever has them) whereas much of Ballard future profits (if it ever has them) will accrue to various joint ventures, of which Ballard owns only minority pieces.
Moreover, the various internet companies are reporting rapidly growing revenues at the moment. Some people argue that they might all be profitable today if they all weren't willing to sacrifice current profits to gain market share that they believe will lead to even larger profits later. In a sense, this is where Ballard hopes to be in 2004-2005, with a product on the market that it and its partners are losing big money on, but are willing to subsidize in order for it to gain market share and ultimately achieve the volumes needed for profitability.
If an internet company said it was going to supply some partners who might, if they choose to at the time, introduce their first potentially mass market product in 2004, of which the company would get some share, and it had a market cap of $1.6 billion today, then that might be an equivalent situation.
Just to save anyone the trouble of pointing out that Ballard hopes to have buses and stationary power units on the market before 2004, my response remains that the bus market is very promising, but way too small (thousands of units, at best tens of thousands of units per year, versus the many hundreds of thousands needed to breakeven in cars), and Ballard's PEM technology is inferior for stationary power applications because of its low efficiency and high cost, compared to higher temperature fuel cells and conventional designs.
I suspect you will make good money on your internet shorts, but not because they are overpriced compared to Ballard. |
