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Time to Forget About Zenn
On July 26th I wrote a piece about oil and energy which also focused on the speculative battery technology company EEstor and it’s minority owner Zenn Motor Company (ZNNMF). Since then I’ve given more thought and some added research to the matter. On July 29th, I posted a correction to my original pieces as follows:
re: the Zenn investment, it seems the information in my piece was incorrect. According to a 7/2/09 press release you can find at
http://www.emediaworld.com/press_release/release_detail.php?id=623265
the Zenn investment was $5M [not $700,00]. The other noteworthy fact from this press release is that Zenn was able to invest the maximum amount permitted under a prior agreement because other investors (presumably Kleiner Perkins) elected not to invest the amount to which they were entitled.It is potentially quite troubling that Kleiner Perkins is no longer supporting EEstor. It is also a bit troubling that Mort Topfer, a former Dell top exec, has left the EEstor board for the second time as of June, 2009.
In sum, I must say that the skeptics on EEstor also have a lot of ammunition.
It’s possible that Weir is hookwinking Zenn into bankrolling them now. But the question is why would Weir want to do that if he did not feel he was going to be successful fairly soon. Expectations have been raised for rapid product visibility. Weir must think he can produce.
As I think about the matter further, it seems increasingly likely to me that the EEstor/Kleiner-Perkins relationship probably came apart some time ago and that K-P no longer supports EEstor. There could be personality reasons behind such a split but I doubt it could be unrelated to a cold business judgement on the part of K-P. That is not a good signal for EEstor bulls.
In retrospect, my judgement now is that the degree of risk in Zenn’s stock is just as high as it has ever been. Therefore I have reduced my Zenn holdings. I still have some shares, but I think they are a pure roll of the dice with probably no more than a 10% chance of success. Fortunately, the price of Zenn has been fairly strong since July 26th, so any follower of this site who wants to become more conservative in regard to Zenn, as I have, is likely to be able to sell at a profit.
In sum, there are many more interesting and important investment decisions that require attention than this one speculation, despite the huge potential that a success would have. I would not allocate a lot more brain cells to Zenn. Either it happens and I will wish I had owned a lot more shares or, more likely, Zenn will fade into the the sunset at some point, another Grand Plan that was not practical.
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11 responses so far ↓
1 robert essian // Aug 12, 2009 at 2:55 am
Professor…Character you have…Now go do what it is you want to do…Again let me turn out the lights…Peace and Thank you
2 James // Aug 12, 2009 at 4:32 am
Jim,
We don’t need Zenn now that Chevrolet Volt is here and gets 230 mpg! And GM is financed by the US government.
3 Ricardo // Aug 12, 2009 at 6:27 am
James, GM is financed by US taxpayers, don’t forget, and by Canadian taxpayers too. We need Zenn or companies like Zenn more than ever. Granted, EEStor remains a gamble - “how much risk do I feel comfortable with” is the question when it comes to deciding whether or not invest in Zenn and, if so, how much.
4 Marcus // Aug 12, 2009 at 9:47 am
Thanks for posting this article, the more I looked into Zenn the more I got the feeling they won’t be around for long. I don’t even Tesla will be around for long if they don’t get bought by a larger car manufacturer. Right now I think the best bet for success in the electric vehicle market is Nissan.
5 Linda // Aug 13, 2009 at 9:25 pm
Jim, thank you so very much for your posts. What you write appears to be honest and from the heart. I appreciate your integrity, which is an extremely rare thing in this day and time.
6 Robert Berke // Aug 15, 2009 at 10:45 am
appreciate your honesty, Jim. would also appreciate your opinion on A123 that is planning an imminent public offering.
7 jkingsdale // Aug 15, 2009 at 5:12 pm
A successful A123 offering should be positive for the whole battery segment, especially lithium. Could see SQM push higher. I have no view of A123 as a competitor.
8 KV // Aug 17, 2009 at 5:50 am
Jim - FYI.
A Long Look at Lithium: Chile’s SQM Poised for Growth
http://seekingalpha.com/article/156053-a-long-look-at-lithium-chile-s-sqm-poised-for-growth
9 Don // Sep 15, 2009 at 5:46 am
YEAH, YOUVE BEEN RIGHT ON THE MONEY WITH THIS ONE! ONLY UP 25% SINCE YOU WROTE THE ARTICLE……
DUH
10 Jimp // Oct 2, 2009 at 3:44 pm
Any changes on your sentiments toward Zenn/Eestor?
http://www.theeestory.com/topics/3586
11 Nathan // Jan 4, 2010 at 8:04 am
It’s so interesting to hear traders talk about risk, etc. etc when related to ZNN. If you guys would load up the podcast and hear the President sit back and just make shit up for an hour you would realize it’s complete vaporware. The company is a scam. KP pumped the stock long enough to sell what they had left. Short every last share you can find and drive this thing into the ground.
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