Curzio’s “The 20-Second Battery: Investing in a Miracle Material”

Sleuthing out the latest teaser pitch from Phase 1 Investor

By Travis Johnson, Stock Gumshoe, April 16, 2014

Today we have to put my usual cautionary note up top. The stock Frank Curzio is pitching as the key supplier for “The 20-Second Battery” is ridiculously small. It has already been recommended to his subscribers over at Phase 1 Investor, so presumably they’ve gotten their fill of the stock (he also touted it about two years ago, at three times the price it trades for today), so there’s no rush. This is a $30 million company (a bit smaller than that, actually), so ONE person investing $10-20,000 could easily drive the stock dramatically higher with a market order — God knows what a couple thousand of my closest friends might do to the stock if they got excited.

The teaser pitch says he’s going to host a conference call with experts on this company on May 1, but though something might be learned there by his subscribers (who cough up $3,000-5,000 a year for the info) it’s not necessarily going to drive the stock higher on that day. What would drive the stock higher is if you all learn about it from us, and rush out and buy it. So please, take your time and research the idea if it intrigues you.

And yes, I know, I shouldn’t be writing to large groups of people about such teensy stocks. But Curzio’s ad is apparently going out to thousands of folks, and lots of my readers are asking, so we’ll just assume that you’re adults and won’t buy a stock just because Phase 1 teased it and because I shared the name with you. Deal?

OK, got that off my chest — now let’s get into the decipherization of the teaser pitch.

The ad starts off with a compelling premise — that we’re on the verge of the next major advancement in battery technology….

“A mobile phone battery so powerful it could jumpstart your car…

“‘The 20-Second Battery’

“It charges in 20 seconds or less… lasts for months on a single charge… and is virtually indestructible.

“This could lead to a New ‘Industrial Revolution…’ — BBC World News

“A revolutionary new kind of battery will soon hit the world market.

“Dubbed “The 20-second Battery” by technology insiders, because it takes only 20 seconds to fully charge… It’s ​smaller, lighter, and thinner than regular batteries… and could power a laptop for up to four months at a time.”

So that’s obviously appealing — I think we’re all aware that battery life is one of the great limiters of the increasingly mobile and portable world, to say nothing of the transportation challenges presented by the fact that electric car batteries take overnight to fully charge.

New battery technologies are constantly being promised, and battery technology is constantly evolving, but it does appear that we’re really waiting for that next “leap” to take us beyond Lithium batteries (that’s what’s in your cell phone and laptop, and in the Tesla), something even lighter and smaller and, perhaps more importantly, something that can be recharged much, much, much more quickly.

So is that technology now finally coming? Here’s what Curzio says:

“In the months to come, this new battery could make the one in your phone, in your tablet, in your laptop, completely obsolete.”

Yes, “in the months to come” is marketing-speak for “someday,” especially when we say that’s when your current battery will be “obsolete” … not when you’ll actually be able to buy this new “20 second battery.” Copywriters (and lawyers, presumably) love these kinds of squishy time periods that sound imminent. After all, if he said “years to come,” you might relax, think about it, and make the terrible decision to not subscribe to the newsletter to find out about the stock this very second.

The tease is, of course, about the “miracle material” that will make this new fast-recharging, more powerful battery possible. If you’ve been reading any newsletter ads over the past couple years you already know that this material is, yes, graphene.

Ooops, I’ve let the cat out of the bag — I’m pretty sure Curzio didn’t use the words “graphite” or “graphene” once in this latest ad presentation, so there’s your first “secret” revealed.

Here’s more from the ad:

“… it’s no surprise that right now, governments and technology companies around the world are racing to get ahead in the development of the material behind this technological revolution…

“In 2013 the European Commission rewarded researchers across Europe $1.37 billion to research the new material behind ‘The 20-second Battery.’

“Recently, a very powerful European country announced the development of a research consortium dedicated to the research and development of this special material at the cost of $120 million.

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“The South Korean Government has funded research to the tune of $300 million.

“And according to technology research firm TechNavio – R&D focused on applying this new material to technologies in industry worldwide is projected to grow over 60% between 2012 and 2016.”

And one of his catalysts for investing, so he says, is that he’s seen the big players get involved — like Microsoft and Nokia, who he thinks are motivated to get ahead on graphene commercialization and therefore come out with the first wafer-thin TV or long-lasting phone battery or whatever… here’s a bit of what he said on that:

“Nokia is one of the companies working with a flagship R&D facility in Europe that recently received a 1 billion euro grant… just to develop the technology behind ‘The 20-second Battery’…

“Nokia holds multiple patents in this technology….

“But lately Nokia’s mobile device sales have been slumping – resulting in the recent acquisition by Microsoft of Nokia’s Devices & Services business.

“Under the terms of agreement, Microsoft has paid approximately $5.44 Billion in cash for not only their devices and services… but to license Nokia’s patents for the next 10 years…

“Microsoft seems to want to compete with Apple and Samsung for a larger share of the cell phone market.

“And the best way to do that is by being one of the first to implement this new battery technology.”

Yes, graphene is a major, major R&D focus of all kinds of electronics and materials companies (and governments and academics) around the world. It’s a hugely game-changing material, I think everyone understands that the potential of this nanomaterial is humongous — it’s stronger than steel, it’s flexible, a thin film over a coffee cup could hold up a dump truck balanced on a pencil and still be transparent, it’s much more conductive than copper, etc. etc. The possibilities are almost limitless, and the promise has been touted by some of the big mining newsletters for at least the last three years.

Why mining firms? Because one of the ways to make graphene, the sheet of graphite that’s the thickness of a single atom, is by using high purity flake graphite. Which is mined out of the earth, which makes up the lead in your pencil, which is used in steelmaking and in lithium ion batteries (yes, a typical lithium battery has more graphite in it than it does lithium).

So, the argument always goes, if graphene is going to change the world… won’t the folks who can mine high-purity graphite get rich?

Well, maybe. That involves quite a bit of future prognosticating on a raw material that’s actually quite common and comes in lots of different purities, and can also be made synthetically — it so happens that most graphite is mined in China, though their control of that market is not as absolute as it is in the rare earths sector, but carbon is everywhere and graphite is really just the purest form of coal.

Graphene is so overwhelmingly valuable as a highly processed nanomaterial that the actual cost of the raw material to make it is inconsequential — the end cost is really all processing right now, when you’re talking about using a single atom’s thickness of a material it doesn’t really matter whether the price is $1,000 a tone or $50,000 a ton.

Since no one has figured out how to reliably mass produce graphene at a reasonable cost yet, and the two-dimensional material in the form of a graphene sheet it was really only isolated for the first time ten years ago (the nobel was awarded for that in 2010), betting on a graphite miner as a key to future graphene supply is highly speculative. The current mechanical method of making sheets of graphene, which is what won the nobel prize (researchers used scotch tape to peel an atom-thick layer of graphene off a piece of graphite), is not necessarily likely to be the way that mass amounts of graphene are produced in the future — it seems likely that some sort of chemical or lithography process will lend itself more to mass production, and whether or not that process requires a certain kind of natural graphite input or not is still completely up in the air as far as I can tell. Everyone from miners to chipmakers to academics to chemical companies is trying to figure out how to make graphene and create a stable supply for the market that everyone thinks will come, but we’re not there yet.

Which isn’t to say that grap