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

To: HarveyO who wrote (3036)	8/28/1998 12:55:00 PM
From: Urlman	Respond to of 5827

In @ 16 7/8 (EOM)

To: HarveyO who wrote (3036)	8/28/1998 1:14:00 PM
From: D.T.Stox	Read Replies (1) \| Respond to of 5827

More press reports trash Ballard again. I saw an article in the Vancouver Sun that may have a bearing on the price drop today. It talks about Umedaly selling stock, and then exercising options to buy more. It mentions the "new" cfo, who is Paul Lancaster, extremely qualified and with the co. since the beginning. My complements to anyone who has successfully traded this stock, I bought at the beginning and am still long all my shares. The co. has proved the mgmt expertise and we have gone from magic technology to proven technology and I am confidant that they can take the next step. Canada seems to distrust anyone or anything that is successfull, and it seems that press opinion varies significantly depending on whether they owned it or missed it all the way along. I still like the co and will buy more along the way.

To: HarveyO who wrote (3036)	8/30/1998 6:10:00 PM
From: Sid Turtlman	Read Replies (2) \| Respond to of 5827

HarveyO: I am surprised that someone as knowledgeable as you about Ballard would put out some significant misinformation about the company. The second line of the article you quoted from the Vancouver Sun states that Ballard has 23,083,665 shares outstanding. As I am sure you are well aware, that figure is wildly understated. According to the Toronto Stock Exchange database, Ballard has 82,686,409 shares outstanding. So even though the stock is somewhat off its highs, the market cap is still US$1.426 billion, an astoundingly high figure for a development stage company so many years from having a commercial product, if it ever does. Even that figure understates the value investors are placing on the company. It doesn't count the warrants Ballard has given to several parties (Chicago Transit and BC Transit are two that I remember, and I think there may be more) that will further add to shares outstanding. More important, Ballard is a minority partner in the various joint ventures that it has formed with Daimler and Ford. So if fc cars are actually introduced to the market in 2004, and if there is enough demand for them that they actually turn a profit several years later, a good chunk of that profit will go to the engine joint venture, the drivetrain joint venture, or the marketing joint venture, not to Ballard itself. Ballard's partners will keep most of that profit. As you may remember, in 1997 we had some discussion on this thread about that point. Everyone had opinions about what the transfer price policy would be for the fuel cells sold by Ballard to the engine joint venture, and the engines sold by that jv to Daimler and other car companies. How future profits or losses get allocated depends entirely on those transfer prices and at this point no one knows, including Ballard, Daimler, and Ford. My opinion is that the car companies will dominate the pricing; after all, they don't have to put out fc powered cars if they don't want to, whereas Ballard has nowhere else to go. As Daimler has stated, fc powered cars will require heavy subsidies for several years after introduction; I don't believe that Daimler will let Ballard make a nickel while it is eating huge losses. Accordingly, I expect most of any profits will be allocated to the joint ventures where Ballard's ownership position is small, or the transfer prices will be set so that the car companies have a low cost supply of engines, and neither the joint ventures or Ballard make much money. Others here disagreed. Whatever the ultimate answer turns out to be, it is safe to assume that Ballard will not keep all the profits. So US$1.4 billion doesn't buy you all the action from Ballard's technology--it just buys part of the action, maybe just a minority piece of the action. Thus, the market is really valuing Ballard's technology at some unknown multiple times US$1.4 billion. Out of curiosity, can anyone here suggest a more overpriced development stage company? Is there something out there with a combination of a higher market cap, a lower probability of success, and a further time to wait until the first profit dollar shows up? I'd love to know, so I can short it.