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Technology Stocks : Ballard Power -world leader zero-emission PEM fuel cells -- Ignore unavailable to you. Want to Upgrade?

To: Daniel Simon who wrote (5574)	7/13/2002 4:50:15 PM
From: Jim	Respond to of 5827

]The article can be downloaded from the Yahoo BLDP board/ Monday, July 15, 2002 Fuel Sell? After years of research, Ballard's power technology is burning up cash, not highways By SANDRA WARD If you thought concept stocks went out with sock-puppets selling pet shampoo and chew toys online, then you're not familiar with Ballard Power Systems and the fuel-cell energy industry. Two years after the air began seeping out of the Nasdaq balloon, burst by loads of dot-com dreck and telecommunications trash, the fuel-cell sector remains aloft, though nowhere near as highflying as it was a while ago. The stocks have descended from dizzying heights, yet they continue to get a lift from the high hopes of clean-energy enthusiasts, whose "greenness" appears to extend to their investment analysis. Such folks love the concept of fuel cells -- non-polluting powerplants that convert hydrogen and oxygen to electricity to power cars, trucks and even electricity systems for homes. What else explains the nearly $1.6 billion market value commanded by market leader Ballard on zero earnings, projected sales of $82 million this year -- a number that can be reached only on significantly stronger second-half sales -- and just $360 million in cash, which is dwindling fast? The company lost $1.05 a share in 2001 and is likely to lose $1.53 a share this year. Ballard executives wouldn't make themselves available to be interviewed for this article. But while a few brokerage firms are still waving the flag for Ballard, others have retreated. Lehman Brothers dropped coverage of the fuel-cell sector in early May without any explanation. Salomon Smith Barney cautioned investors in late April that British Columbia-based Ballard's expenses were running higher than expected and that it was burning through cash at an alarming rate. Yorkton Securities of Toronto also voiced concern about the cash-burn rate and warned clients to expect a large and dilutive equity offering later this year. Wedbush Morgan Securities repeated a sell recommendation on Ballard in early June. Some investors Barron's spoke with worry, too, about Ballard's practice of running investment income through its revenue line. Indeed, it appears that interest income accounts for about half of Ballard's revenue. With interest rates at 40-year lows and cash balances slim, that investment income is in decline.