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More Fuzzy Math at Altair

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March 14, 2007 – Comments (15)

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Original article is here.

 

Usually, the Yahoo! message boards for penny stocks like Altair Nanotechnologies (Nasdaq: ALTI) are worthless. The long and strong engage in their textbook demonstrations of confirmation bias and label anyone who disagrees a "basher."

 

But someone pointed out to me a very interesting "basher" post, which brings to light one of those bits of fuzzy math that has made me so skeptical of Altair over the years.

 

The recently released 10-K, which covers the period ended Dec. 31, notes the following, regarding the much-hyped sale of NanoSafe battery packs to Phoenix Motorcars.

 

"Product sales increased from $149,373 in 2005 to $961,380 in 2006 due to our first sales of battery packs to Phoenix Motorcars, Inc. Of the 11 battery packs ordered, four were shipped and seven were billed and held by us based upon the written request of Phoenix ..." [emphasis mine].

 

Now, compare that with Altair's Dec. 28 press release on this topic, which states, "Altair Nanotechnologies Inc. announced today that it shipped ten rapid charge, high power NanoSafe battery packs to Phoenix Motorcars, Inc. on schedule.... Altairnano's NanoSafe battery packs meet or exceed all performance specifications and the shipments were made on schedule and on time to Phoenix Motorcars," said Altairnano President and CEO Alan J. Gotcher Ph.D." [Again, emphasis mine.]

 

I don't know about you, but where I come from, four is not 11.

 

Altair seems to have realized that this looks funky, because if we look back to the 10-K, we see management waffling and explaining that, by its interpretation of accounting standards, not delivering the batteries really does count as delivering them. It states that the above-described non-delivery of the remaining seven battery packs "complied with the revenue recognition criteria described in the Securities and Exchange Commission 'Staff Accounting Bulletin No. 104 - Revenue Recognition in Financial Statements.'"

 

Uh-huh. But it sure doesn't pass the sniff test. Smells to me like Altair was stuffing the revenue channel at year-end to be able to show big top-line growth. And that's why I view any of management's projections and pronouncements to be suspect.

 

Beware, Altair, lest your portfolio become nanotized.

 

Yahoo! is a Stock Advisor pick.

 

At the time of publication, Seth Jayson had no positions in any company mentioned here. See his latest blog commentary here. View his stock holdings and Fool profile here. Fool rules are here.

15 Comments – Post Your Own

#1) On March 14, 2007 at 3:57 PM, TMFBent (99.82) wrote:

Most of the masses out there who take issue with what I write are too afraid to take up the challenge of actually posting their comments to a public board, where they can be scrutinized.

 

But I don't think they should be wasted. Some of them are just that funny. So here, without further ado, is an email I got today regarding this Altair piece. It was sent to me by a real-live English professor at a major Iowa university.

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Seth,



Did it ever occur to you, in a moment of journalistic fairness, to call Altair for a comment or explanation of this discrepancy?



You and Jack have such chubbies over knocking this stock that you an't even begin to be fair.

-- name withheld to protect the ranty

 ---------------------------------

This marks the first time I have been accused of having a "chubby" for Altair.

 

Oh, and no, it didn't occur to me to call Altair, because I don't need to know what Gotcher's spin is on this discrepancy. I've spoken with him, and his P.R. people in the past, and they've told me some stuff that didn't exactly turn out to be true. (See this article for those whoppers.)

 

Why is it that stock pumpers think a company shouldn't be judged on its public filings, that it should be afforded a last-minute, courtesy "do-over."

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#2) On March 14, 2007 at 3:57 PM, 927jillian (< 20) wrote:

But what if the state of California uses "alti" for its clean power needs, they would use a local company. Can you afford not to take a chance?

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#3) On March 14, 2007 at 5:01 PM, imagesone (< 20) wrote:

From the numbers given in the conference call, it sounded like they were selling these battery packs for something like $70,000 a piece----so how much is Phoenix currently asking for the whole car? One article said they were going to try to sell it for $45,000.

Also, dosen't ALTI own 16% of Phoenix so they are kind of selling it to themselves.

Who is this big Phoenix company anyway?? Probably not much more then a few guys in a warehouse right now. Where are their millions comming from? Have you seen their other electric car? It had a body from the 30's or 40's and was probably built in a grage.

Finally, is ABAT for real? Anychance they are connected to A123?

 

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#4) On March 14, 2007 at 5:32 PM, TMFBent (99.82) wrote:

But what if the state of California uses "alti" for its clean power needs, they would use a local company. Can you afford not to take a chance?

What are you talking about? Do you know what Altair purports to do? And Altair is no more "local" to California than it is to Arizona.

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#5) On March 15, 2007 at 5:05 AM, jakool (< 20) wrote:

Your point is correct but not that big of a deal.

Let me ask you something! Under all the articles you write for ALTI, it says that you do not hold any positions in this stock! Yet you keep coming back to it and post negatives, this company has had many positives in the past few weeks, and yet only the negatives are posted by you. So why exactly is it that you are so interested in this stock and reporting the negatives only?

Did you work for this company before and had problems?

Did you lose too much money getting in this stock at some point in time!?

As I stated before on your earlier comment regarding ALTI, I do not read these articles on this site but noticed too many negatives from the site, and that made me want to know what the deal is with you and this stock!

Let me make a note here, I was just talking to a very good trader earlier regarding this issue. This is a heads up for all those traders out there who read and trade by these rather weak arguments. This stuff gets you in deep holes. You can always read them but investigate them yourselves and evaluate the potentials and down sides yourselves. This gentleman here does not post anything at times when ALTI is headed down, but as soon as this stock is up even a single percentage, he pops up with some issue that just tells you that this guy is on the short side in some way. Yes, he does state that he does not hold any positions with the stock but always keep in mind that it is not necessary for this guy to own the stock and defend the short side. He might be investing in the stock for his family or friends, and can always state on the bottom of his article that “he does not own this equity”…

Good luck trading ALTI, this is a good stock…I’m not holding it but will be as soon as that $4 level is tested again

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#6) On March 15, 2007 at 9:27 AM, TMFBent (99.82) wrote:

Not that big a deal? You're entitled to that opinion, but I've seen Alti make these sorts of "minor" mistakes for years, and if you look at the long-term chart, you'll see what they add up to, and that's money lost for investors. 

 

As for the rest of your conspiracy theory, it's not very original, nor logical, and you're spinning it to the wrong crowd. People here are too smart to buy it. (You should probably contain the Yahoo boards stuff to Yahoo...)

 

Your accusations that I may have friends or family in the stock are insulting and false. And, for your information, they would be in violation of our compliance rules. If you really believe this, I urge you to report it immediately. However, you might want to have some proof rather than an unfounded accusation.

 

Check my record, I'm interested in lots of companies who I think make promises they can't keep. And if you check my record, you'll see that I'm usually right.

 

If you believe Altair is worth betting on at these prices, please present me with some real reasons -- including numbers. I'll be happy to debate them with you.

 

If you want to prove your prowess as a trader, you came to the right place. We'll be watching your caps score. Good luck.

 

Sj

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#7) On March 15, 2007 at 9:40 AM, jakool (< 20) wrote:

The market will have a good answer for you, just hang in there...Ciao

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#8) On March 15, 2007 at 10:44 AM, TMFBent (99.82) wrote:

Uh huh. Jakool, I've heard that for years. Look at the market's answer.

 

Got anything substantial to offer other than your baseless accusations of my assocation with family shorts?

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#9) On March 15, 2007 at 11:25 AM, ValueIsValuable (82.80) wrote:

Looks like you might have touched a nerve here.  LOL.

It is amusing that everyone seems to have a "chubbie", to borrow the going parlance, for correcting you and letting you know how one-sided and "bias" you are.

Now, in the real world, if an investor is convinced that TMFBent is wrong and that Altair is a great stock, he would just buy as many stubs as he can get his hands on.  Then he could just "let the market answer for you", as jakool suggested.

However, if you are just looking for a quick score and you need more suckers to pawn off your worthless shares to, then it makes a lot of sense to bully shorters into shutting up.  And that is what this looks like to me... baseless (and apparently logic-free) attempts to make guys like TMFBent shut up!

Bottom line, this is not Fox News.  Stock analysis does not have to be "fair and balanced".  Some stocks just plain suck.  Thank God that there are guys out there like TMFBent who are willing to say that the emperor has no clothes.

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#10) On March 15, 2007 at 5:30 PM, ExCaliJM (< 20) wrote:

I understand the need to be carefull with this stock. I do not however understand your constant negitive attitude and writtings against ALTI.

I have to agree with TMFBent in the sense that you seem to write negitive articles only after the stock moves up. I would be more interested in your articles if they did not SEEM so biased.

I do agree with you that ALTI, in the past, has made less than truthful statements. However, lets look at the product they are producing and what the possible outcome for the company may be.

I honestly believe that this type of technology is the future. I would much rather have a shot at capitalizing on this then not. If there is another company that has been spotlighted in this area more than ALTI I would like to know about it. 

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#11) On March 15, 2007 at 5:33 PM, ExCaliJM (< 20) wrote:

I understand the need to be carefull with this stock. I do not however understand your constant negitive attitude and writtings against ALTI.

I have to agree with jakool in the sense that you seem to write negitive articles only after the stock moves up. I would be more interested in your articles if they did not SEEM so biased.

I do agree with you that ALTI, in the past, has made less than truthful statements. However, lets look at the product they are producing and what the possible outcome for the company may be.

I honestly believe that this type of technology is the future. I would much rather have a shot at capitalizing on this then not. If there is another company that has been spotlighted in this area more than ALTI I would like to know about it. 

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#12) On March 15, 2007 at 6:28 PM, TMFBent (99.82) wrote:

I honestly believe that this type of technology is the future. I would much rather have a shot at capitalizing on this then not. If there is another company that has been spotlighted in this area more than ALTI I would like to know about it.

 

Assuming this technology is the future, why do you believe Altair is the company that will capitalize on it? Do you believe it's exclusive to them? On what do you base that belief? Do you think Altair has the capital and staff to be able to ramp up production? On what do you base that belief? Do you think other major materials and manufacturing companies are standing still and letting a tiny little startup get ahead of them? If Altair's got something so special, why hasn't Dow, BASF, 3M, Mastushita, GE, or any other large company simply picked it up?

 

There's one pretty simple answer. It's because what Altair has isn't really exclusive.

 

THOSE are the questions that need answering, not "this is the technology of the future."

 

Sj 

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#13) On March 16, 2007 at 11:44 AM, ExCaliJM (< 20) wrote:

I have heard of another company that was in the "Process" of creating a battery (Toyota??). However no major tests have been performed . As for other companies producing another battery, you have to remember that ALTI has a patent for it's material which gives it a quick charge and long life.

Now, I am not saying that ALTI can or will be able to mass produce these batteries instantly, but then again, a year ago they had no way to produce what they have done already.  

"It's because what Altair has isn't really exclusive.

Has any company brought forth a battery that can perform as well as or better then Altair's? Being exclusive in todays world is impossible! The best you can do is be first and best! Altair was first and as of right now, best.

"If Altair's got something so special, why hasn't Dow, BASF, 3M, Mastushita, GE, or any other large company simply picked it up?"

Why indeed! I have heard people use that argument for 3 years now and I have yet to hear a big company say they have produced one. 

My opinion on WHY is I beleive the large companies are waiting on the response of the public before they put their dog in the fight.  

Until I hear of another company/product that can do what the Altair battery can do I will continue to supprt ALTI.

 

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#14) On March 19, 2007 at 11:06 AM, jkipling (77.13) wrote:

Ok, right thread now.

I think jakool and ExCaliJM actually have some good points.  I don't want to dispute or argue the facts TMF presents in their negative articles about ALTI, those are indisputable facts, however the issue I want to debate is why keep writing these articles?

Everytime I read a TMF article on ALTI it seems like a counterpoint to a point of view that strongly advocates purchasing ALTI, the problem is that point of view doesn't exist in the published forum as far as I'm aware. I never see any of the articles on investing stating the opposite of what TMF perpetually states in its ALTI articles.  It's like you guys are debating a wall and what's the point in that!?  Sure some people, myself included, own ALTI and other investment advisors grade ALTI as buy, but that's their right.  They have the same access to the info you do and they can make poor decisions if they want to but don't create a debate from that.  People snort glue but you don't see perpetual warnings from the Board of Health on the hazards of doing such a thing.

Why don't you try to contact the higher ups at Haliburton, Verizon, Microsoft, Putnam, Smith Barney, Bank of America.  See how much false information you can catch them on, I bet it's a lot, and wouldn't that be more interesting?

 Perpetually pointing out ALTIs revenue generating flaws would be like the New York Times perpetually putting out a front page article accusing President Bush of having Conservative tendencies.  The whole article would cite policy facts and show how that is in step with Conservative thinking.  Don't you think people would stop reading the New York Times then?  This is why I've stopped reading The Motley Fool.  I appreciate TMF a great deal for this open and free forum, it has the potential to educate novice investors such as myself a great deal, however I would be cautious to ever give any money to TMF if this is the kind of reading material they offer.

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#15) On March 20, 2007 at 2:29 PM, jkipling (77.13) wrote:

ALTI is up nearly 8 cents, and there hasn't been a peep from TMF, maybe we finally got through to them.  Thank goodness.

btw recent posts have been more worth reading!!  Society has been improved!!!! 

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