Ener1 (HEV) Downgraded By MDB Capital

According to analysts at MDB Capital, if you’re holding on to Ener1 stock, now may be the time to let it go. The reason? Think Global, Ener1’s major customer, has run into some financial difficulties. Here’s a quote from the analysts published on StreetInsider.com:

"Think Global, Ener1’s most important near-term customer, announced it was temporarily halting production of its Think City electric vehicle due to working capital constraints. The company, which unsuccessfully approached the Norwegian government for direct support, reportedly needs between $15 million to $29 million in short term loan guarantees as a means to finance its current operations and planned expansion. We are now hearing that Think Global has been unable to find other funding sources and that the Norwegian government has again refused to provide the needed capital for continued operations. It now appears that there is a real likelihood of Think Global ceasing operations or at the very least scaling back to a much smaller enterprise. In any event, it now seems that Think Global will not be able to uphold its end of the $70 million contract with Ener1 for the delivery of batteries for the Think City vehicle. Without this contract Ener1 has little in the way of other contracts that might generate near term revenues and the valuation of the stock is no longer justified."

Leave a Reply

Your email address will not be published. Required fields are marked *