Berko answers stock questions
I want to invest in a small company that specializes in nanotechnology because I think this is the wave of the future. Im told of a company called Altair Nanotechnologies that is, according to research given to me by my broker, on the cutting edge of many new products. I would like to buy 20,000 shares of Altair at $3.90 because it seems to have excellent promise according to WR Hambrechts research. Hambrecht, as you know, is that big New York Stock Exchange firm which was very active during the tech stock market and people made big money following their recommendations. Hambrechts people believe that Altairs revenue will grow tenfold this year and that the company will finally make a profit. Hambrecht is a member of the NYSE so their research certainly must meet sound standards. But I would like your thoughts on this stock, which would also give me an added level of comfort before I invest $39,000.N.W.Kankakee, Ill.
Altair Nanotechnologies Inc. (ALTI-$3.30) is a research and development firm with activities directed at high-sounding sectors like: advanced materials, air and water treatment, alternative energy, lanthanum-based pharmaceuticals, biocompatible materials and chemical delivery products. Last year ALTI put $4.3 million in revenues on the books and lost 29 cents for each of its 69 million shares, or about $20 million. ALTI hasnt made a profit since it emerged from the woodwork as a new issue four years ago.Nanotechnologies is a fancy name that excites millions of gullible simpletons who believe theres a Golconda behind every rinky-dink, small company in the nano-business. Most of ALTIs research, except for alternative energy, isnt worth writing home about especially its lanthanum (a ductile rare metal) based pharmaceutical research, which has been an embarrassing bust.However, ALTIs alternative energy research seems to have excited the hoi polloi who pushed the price up 65 percent from Decembers $2.50 a share to $4.10 last March. And the price has fallen even more from $3.90 to $3.30, which is a $4,000 savings on 10,000 shares. The big deal is ALTIs rapid-charge, high-powered nano-battery. Supposedly a sport utility vehicle, equipped with this battery using nano-structured materials for the negative electrode, recently put on an impressive performance. Now I dont know what an impressive performance is but I can tell you that ALTIs chief executive officer, Alan Gotcher Ph.D., has been talking up his nano-tale batteries for several years.But all is not as bad as it seems; Gotchers battery has produced more than $75 million in losses that can be used as a write-off if ALTI makes a fortune on a rumored nano-patent for powdered water.Still there are idiots on the street who believe ALTI is the next Microsoft, Google or Wal-Mart. Brokerages Ive never heard of like Merriman Curhan Ford, Canaccord Adams and the Maxxim Group have buy recommendations on the stock. And some poor schlump (John Roy) at WR Hambrecht also rates ALTI as a strong buy. This fellow thinks ALTIs nano-batteries will generate $42 million in new revenues this year.So computing this new revenue factor into his kindergarten computations, JR suggests that ALTI, rather than losing millions this year, will net 9 cents a share, or $6 million. Meanwhile, ALTI management wantonly spends money like drunken sailors. So in order to meet lease obligations, payroll, etc., Gotcher has to raise cash to pay the bills; so guess which brokerage firm is ALTIs underwriter? Why Hambrecht, of course, and theyre telling starry-eyed investors like you that ALTI will soon be a $6 stock.Meanwhile, if that battery is so good, please tell me why ALTI is still selling at a low $3.30 a share?Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, FL 33429 or e-mail him at email@example.com.
Support Local Journalism
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.
User Legend: Moderator Trusted User