Shares of Ballard Power Systems Dive More Than 15% As of Late Thursday, January 25, 2017 – Kehoe Law Firm Commences Investigation of Securities Claims
Kehoe Law Firm has commenced an investigation of potential securities claims on behalf of purchasers of the securities of Ballard Power Systems Inc. (NASDAQ:BLDP) to determine whether BLDP may have issued materially misleading business information to investors.
On January 25, 2018, The Motley Fool reported (“Why Ballard Power Systems Inc.’s Shares Plunged 16% Today”) that “[s]hares of fuel cell company Ballard Power Systems Inc. . . . plunged as much as 15.8% late Thursday after a short-seller attacked the stock. At 3:15 p.m. EST, [BLDP] shares were still near their daily low, down 15%.” [Emphasis in original]
Spruce Point Capital Management, according to The Motley Fool, “released research via a press release and an article on [Seeking Alpha] laying out its short case for [Ballard Power Systems] stock.” The Motley Fool reported that
Spruce Point [Capital Management] thinks Ballard’s Chinese partnerships won’t live up to expectations. The research report argues, for the most part, that the fuel cell market isn’t all it’s cracked up to be in China, and that as a result there’d be very few long-term wins for joint ventures there. [Emphasis added]
Ballard Has High Percentage Downside Risk – Seeking Alpha Reports About Spruce Point Capital Management’s Review of Ballard Power
On January 25, 2018, a Seeking Alpha article (“China-Based Investigation Into Ballard Power Suggests Earnings Disappointment, 35-70% Downside Risk”) reported the following summary gleaned from Spruce Point Capital Management’s research report on Ballard Power Systems:
[BLDP’s] stock rose +167% in 2017 largely on a capital infusion from China’s Broad Ocean, improved financial performance, and hopes that its Chinese partnerships would expand profit potential.
[Spruce Point Capital’s] China due diligence suggests its partnerships are not likely to succeed given Broad Ocean’s weak financial and market position. Further, [Spruce Point Capital] believe[s] the China market is developing below plan.
Ballard [Power] has prior failures in China (Azure) and a general history of not delivering on its business objections, leading to successive financial losses and share dilution.
Ballard [Power] has only risked $1m of capital into the Synergy JV, and insiders own just 0.5% of the stock. Broad Ocean can sell its 17m shares in July 2018, which [Spruce Point] expect[s] to be a big overhang.
Spruce Point Capital also, as reported by Seeking Alpha, stated that “Ballard [Power] trades at an all-time high valuation on excessive optimism at high risk of disappointing. By normalizing its valuation, [Spruce Point Capital] see[s] 35% to 70% downside risk.”
Spruce Point Capital Management’s review of Ballard Power, as reported by Seeking Alpha, found that “[b]ased on [Spruce Point’s] on-the-ground China research, in [Spruce Point’s] opinion, Ballard is set to disappoint expectations as a result of having selected the wrong Chinese partners, and the market and infrastructure for its products not having developed according to plan.” [Emphasis in original]
Ballard Power Systems Stock Suffers Steep Price Drop
On the news of Spruce Point Capital’s research report, shares of Ballard Power fell $0.52 per share, or more than 13% from its previous stock closing price, to close at $3.27 per share on January 25, 2018.
Have You Purchased, Or Otherwise Acquired, Stock Shares of Ballard Power Systems?
If you purchased, or otherwise acquired, shares of Ballard Power stock and have questions or concerns about your potential legal rights or claims, please contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected].