This one has come up in questions from readers quite a few times over the past few weeks that it’s been circulating, and the shares have already moved up a little bit with the company trying to get some press coverage tomorrow as they demonstrate their technology. So now seemed like a good time to mention them.
The teaser is from Untapped Wealth and editor Tim Fields, they’d like $99 from you for the special report and a subscription to the newsletter … Untapped Wealth isn’t covered by Hulbert and I’ve not seen their long term performance figures, so I have no idea whether or not they’re any good. But I do know you don’t need to subscribe just to find out the name of this “forever battery” company — not while the Gumshoe is on the case!
One small point gives me pause: Fields takes credit for recommending New Oriental Education (EDU), which we’ve seen teased several times in the past year, about a year ago, which is fine and probably true … but in so claiming he says that “The last recommendation letter I sent out turned $75,000 into $225,000 in less than 12 months!”
I don’t know how he tallies his performance, but the last two teaser stocks that I’ve sleuthed out that came with his name, both of which were sent and, one assumes, written within the past year, well after the EDU rec, would have lost money by my calculations: E-House (EJ) and Clearwire (CLWR). Not a lot of money, I admit, which might be a moral victory in this market, but the claim that the “last letter” he sent provided 200% returns rings a little thin with me.
But back to that forever battery … the hyperbole is strong within this one, my friends:
“It’s like getting a royalty check EVERY time someone buys a battery – anywhere in the world!” Tim Fields
… is how the ad begins — how often does someone quote themselves in the headline of a letter to add veritas? Odd.
And then goes on to say that …
“The Most Startling Innovation In 208 Years Is About to Be Unleashed On the Market… And once it is, you’ll never plug in your cell phone, iPOD, or laptop again!”
The ad is teasing a company that’s trying to develop and market a new battery design that relies on nanotechnology, which certainly doesn’t narrow the search down to a single company (there are at least dozens of high profile researchers working in this area both in large corporations and at Universities, and many several smaller companies counting on making the next breakthrough in this area, a few of whom are public)
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So what do we learn specifically here?
First, the case is made that everything from mobile electronics to transportation is clamoring for a better battery. That we can all agree on, and we’ve seen battery companies teased before (like Ener1 for their version of the lithium ion battery for automobiles). Clearly, we’re not all going to have phones that are much smaller (like Qualcomm’s April Fool’s day HandSolo, perhaps?), or electric cars parked up and down our streets, until batteries get smaller, more long-lived, faster, and safer (no one wants their car to catch fire).
The tease is, of course, that Tim has discovered the company that can best provide deliverance from this widely accepted problem. And that’s a standard investment marketing ploy that we all see nearly every day — build up a problem that everyone has heard of or understands, explain why it’s so important to solve that problem … and then sell the one solution you have as the only solution, without mentioning the other possible solutions or competitors. His marketing letter is here if you want to whole spiel about battery evolution.
Not to cool your jets or anything — maybe this one is the “real deal” … let’s continue …
The promise of gains is more dramatic than most other stocks we’ve looked at — Tim is “so excited about this little company and … expecting its shares to multiply 3,600% within the next 12 months.”
So — does anyone want a three thousand percent gain? Anyone? Good enough? What’s the sweet spot — would it be better if he promised 500% gains and seemed more realistic, or 30,000% to really knock your socks off? Tough call.
So we’ll settle for the 3,600%. Let’s see how it works out for him.
So the special report is called “The Forever Battery: Making Today’s Batteries Obsolete… And Its Investors Wildly Wealthy”
And by way of teasing the details, here’s what we get:
It’s a whole new battery design, not just a new chemical makeup for the standard design.
It has relied at least in part on military funding for R&D, apparently part of a push after Gulf War I to make a better battery after some battery problems and failures in that conflict.
He calls it the “world’s first nano battery” and says it’s ready for production.
Of course, we’ve got a quote from the reputable news media to add some weight to Tim’s claims: ‘Christian Science Monitor says, “nanotechnology…has allowed the battery industry to begin to catch up with the electronic industry’.”
And here’s another excerpt that talks about what this battery company’s technology really offers:
“So how does this “forever battery” work?
“Simply put, its design keeps internal chemicals from mixing together – which is the reason even a dormant battery looses power.
“It also controls the battery’s internal reaction by isolating the electrolyte when power isn’t needed (which means it’s losing ZERO power when you’re not using it!)
“This is HUGE for manufactures because their batteries now have an infinite shelf life!”
So that makes for probably enough information for the Gumshoe to go on … the Thinkolator 5200, recently upgraded and glitch-free, spins quickly to action and tells us that this is…
mPhase Technologies (XDSL, trades over the counter)
This used to be primarily a DSL company, as you might suspect from the ticker symbol, but apparently got into the battery business a while back in a joint venture with Bell Labs/Lucent/Alcatel Lucent, or whatever they’re called today. The division that is developing the battery is called AlwaysReady, and they call it a “smart” battery. It is clearly focused on military and small consumer electronics applications.
The company’s own description of itself is as follows:
“mPhase Technologies Inc. (OTCBB: XDSL), through its wholly owned subsidiary AlwaysReady, Inc. is focused on developing and commercializing a new battery technology based on a well patented phenomenon known as electrowetting which provides a unique way to store energy and manage power that will revolutionize the battery industry.”
So … I’m no patent lawyer or engineer, and the only patents that are actually in mPhase’s name are for various DSL products and technologies, but they do say that core researchers on their team have developed at least ten patents for this nanobattery technology — one assumes that mPhase owns or has licenses to all of the relevant technologies, so hopefully that’s true.
Company officials reportedly said last fall that “if properly marketed” the battery could get 3-5% market share in the reserve and advanced battery markets within a number of years as their first stage of development. That’s a $1-2 billion market, apparently, though I haven’t verified that. So, take a wild guess and say $50 million in sales at some point in the next several years? That would certainly be significant for them, since, coincidentally, $50 million is just about the market cap of the entire company.
The Christian Science Monitor article that they quote is here, it’s about a year old — the way it’s written, it emphasizes the fact that mPhase’s technology is focused on battery shelf life, allowing batteries to keep their charge indefinitely when not in use. They also tout that they were mentioned in a Credit Suisse analyst report about nanotechnology, that report is here (pdf file) if you’re interested.
The careful reader might come away from reading both of those pieces and conclude that there are a whole lot of companies working in this area, but that there’s certainly no consensus about where technology or nanotechnology is going to take the battery in the next decade — maybe this mPhase technology will be significant, maybe one of the other companies or researchers in this space has something much better.
And if marketing is going to drive the success of this company in the next few months, they’ve certainly got a head start — they issue press releases at least as frequently as I issue self-important third person references (that’s pretty often for the mighty Gumshoe, as you may have noted). The latest one is for the first ever public demonstration of the battery, a demonstration that for God knows what reason is being held at AJ Maxwells in Manhattan. That’s a steakhouse. I don’t know why.
I mean, I do know why it’s a steakhouse — I don’t know why an advanced battery demonstration is taking place there. Do they need to ply investors and reporters with meat to get attention?
You can certainly read all their press releases from their website (their audio barrage starts immediately, check your volume), and view a video of their gee-whiz stuff, and read lots of other supporting information.
The stock has been up and down in the last year or so, driven no doubt by news releases and perceived developments and successes or failures in testing. They’re also going to need some serious partners to develop any capacity, so perhaps news of that has driven the price up or down recently as well. The shares are around 12 cents at the moment, after almost doubling after this particular marketing campaign and the company’s own PR machine ramped up for this upcoming demonstration, but the shares were much higher a couple years ago (I assume those higher prices in the further past were when they were concentrating on DSL technology, but perhaps they were previous iterations or future promises about the “forever battery.”)
So … this battery has been in development and testing for at least a decade. Is now the moment to get on board, and is this the breakthrough battery that’s really going to make a difference?
I’m a little bit intrigued, but I’m certainly not an expert on battery technology and don’t know how many carcasses of advanced battery companies we’re standing on as we consider the viability of this firm. I am fairly certain that his must be the company Tim Fields is touting for Untapped Wealth, but I’m equally certain that I’d like to know more before I put my money into it.
And they’re clearly still in the very early stages, even after 14 years of development, so I imagine that if this is really going to go up by 3,600% there might be time for a bit of patience. All the talk is still about what this battery could do, and the applications that might work, and the R&D contracts that they’re still winning. Nothing that I’ve seen yet about actual products, or deals with manufacturers, which would be the next very big step, and until there’s something more to sink your teeth into there’s no way for me to even guess at what a fair valuation for the company might be. Remember, even if you’re poky and patient you could still let it double a few times before you get on board and get an easy 30 times your money if it really is going to hit that 3,600% return from today’s price. And that’s assuming that it moves up in a straight line, starting tomorrow … which has happened, roughly speaking, never.
I would certainly classify these tiny OTC shares as a gamble — whether that’s what you’re looking for, and whether this particular company is the best gamble in the space? Well, as long as it’s your money, it’s your call. They are a real company, I assume (though don’t know for sure) that they’ve got either ownership or long term access to those battery patents they claim, they say they’ve managed to successfully manufacture the nano membrane in a commercial facility, and they are demonstrating something tomorrow, but that’s all I can say with any confidence. Oh, and they have almost no cash on hand, but also not all that much debt (only 1.6 million). Perhaps the demonstration will be key to raising more capital, since it’s certainly going to be a while before they become profitable. If they become profitable.
They’ve demonstrated this technology before in conjunction with Lucent, a couple years ago, but all that battery did was prove the concept and light a single LED. Hopefully this demonstration will be cooler — maybe they’ll fire up a batter powered blender and make margaritas for the crowd.
Feel free to share if you’ve got a feeling for this one. Or better yet, have done any research on them and their competitors.
And if you go to the demonstration on Thursday, let us know if you get any free meat.
Happy Investing, everyone.
full disclosure: I do not own shares of any company mentioned here, and will not trade in any investment mentioned for at least three days. I have received no free steaks, chops, or other cuts of meat for writing about this company.
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