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Technology Stocks : Fuel Cell Investments -- Ignore unavailable to you. Want to Upgrade?

To: Savant who wrote (77)	9/21/2000 12:13:44 PM
From: ciVic	Read Replies (1) \| Respond to of 280

in from 33 3/4 ENER :)) ciV

To: Savant who wrote (77)	9/21/2000 1:37:18 PM
From: Bradpalm1	Read Replies (1) \| Respond to of 280

As I said, I like ENER and I also like RTK and TESI (Texaco Energy Systems, Inc.). Here's part of the reason why. Repost-Article about the Texaco/ENER deal and RTK. The new relationship between Energy Conversion Devices and Texaco could be a true landmark - it depends on how committed Texaco is to really moving the alternative energy agenda forward. This remains to be seen (but see Texaco material below for evidence that they are committed). For TX, with a market cap of $28 billion, it could be that this deal was nothing more than cheap "green" PR. The $67 million they paid for 20% of ECD and two board seats is petty cash for them, and probably a lot loss than their annual advertising budget. It was a tremendous deal for them (which their representative at the press conference admitted - gaffe), and their was grumbling in the chat rooms that ECD management had sold too cheap again. If ECD has been conned it was a masterful job by TX - Stan Ovshinsky has a 40 year history of minimizing dilution and loss of control of this company. He would never have sold an oil company (!) 20% of the company unless he was thoroughly convinced that TX is sincere. Texaco announced in March that it intended to form a relationship with a fuel cell company this year. ECD could be the deal they were talking about. The big news for those particularly interested in fuel cells is that ECD has a regenerative fuel cell (RFC) in development. An RFC works like an ordinary PEM, but can be run in reverse to electrolyze hydrogen from water. The beauty of this is that it can be used to produce electricity when grid power is expensive (day) and than reversed to produce H2 when electricity is cheap (night) -- sort of an energy arbitrage. This will become increasingly important as utility deregulation causes consumers to see different prices at different times of day on their bills (industrial electricity customers already do). The big question is what will ECD do with all of this cash? For a company of ECD's size, $ 67 Million can only mean one thing - manufacturing capacity. This deal could only have happened now because ECD management has decided that they are ready to greatly increase production of one or more of their products now. Obvious candidates are photovoltaics, batteries, and OUM memory with Intel. A press conference and conference call announcing the TX deal revealed the following: --The investment in ECD is only TX's first step into the fuel cell business --TX is especially interested in ECD's H2 storage technology, and a JV will be created by the two companies to develop this tech --TX scientists will be relocated to ECD --TX's support of ECD's H2 efforts will help commercialize the technology --The RFC uses a non-noble metal catalyst, i.e. no expensive platinum --ECD's metal hydride storage medium is based on magnesium TX and ECD have been talking about forming this relationship for four years (probably necessary to convince Stan!) H2FC participated in the conference call and asked Ovshinsky about the RFC and how big a prototype the company has. Ovshinsky neatly ducked the question. Nevertheless, the announcement of this device makes ECD, in H2FC's opinion, a full-fledged fuel cell company, which is why it now has its own box on this page. The following excerpt from Texaco's recent quarterly (page 19) sheds some on light on the degree of TX's commitment to developing fuel cell technology: Texaco Energy Systems Inc. Texaco Energy Systems Inc. (TESI) was created in 1999 to explore opportunities to broaden our energy portfolio. Leveraging the strength of a global corporation, TESI is developing businesses related to fuel cells, hydrocarbons-to-liquids (HTL), and alternate fuels. As a technology-based company, we plan to apply energy expertise and proprietary technologies to make these emerging energy businesses a reality. With the creation of the new division, we systematically began evaluating opportunities in the fuel cell industry. We sought to determine whether we could leverage our recognized industry leadership in fuel processing and feed conversion into a joint-venture opportunity with a fuel cell supplier. That investigation led us to: --Create a Fuel Cell Technology Center at our Bellaire office complex; --Begin the installation of an actual fuel cell to power part of the office complex load (which complex incidentally houses our major computing center) Recall also that Texaco is working with Rentech (Gas-to-Liquids technology) and that Rentech is exploring the possibility of building a nine megawatt fuel cell with FCL. The way ECD stock has languished over the years is pretty amazing. Wall Street must not like the company for some reason - maybe the perception that management is more interested in playing in his lab than making money. The company has been around for a very long time and has never shown a significant profit. To someone predisposed to view it that way, it might look like management has intentionally sought only enough revenue to support operations. But the company has critical and potentially disruptive technologies in several sectors, and is well capitalized and debt free after forty years in business. This new relationship with Texaco is a monumental change in tone. Perhaps ECD can finally start getting Wall Street's well deserved attention. ECD Home Page - very recently updated - excellent reading ovonic.com