A Picture's Worth a Thousand Words

Is this the kind of cutting-edge research lab you expect from a self-proclaimed nanotech leader that was (earlier this year) worth several hundred million dollars? In the words of one of my waggish colleagues who spent years of his life in the pharmacology lab, that lab's got "less equipment than a high-school chemistry class." Open-toed, high-heeled shoes in the research room? What kind of important experiment is being conducted with that red fluid in the center? Is this all play-acting?

I don't want to oversnark this, but I think this is a fair question, especially because Altair Nanotechnologies (Nasdaq: ALTI  ) produces a lot of fluff, and it has a long history of generating more enthusiasm than earnings.

In recent weeks, reality has begun to creep back into the share price at Altair, which earlier this year shot up to more than $6 a stub after a press release purported to describe a breakthrough in its lithium-battery technology. Said breakthrough has thus far produced only an R&D agreement with an undercapitalized Chinese battery company that plans to try and sell its wares to the manufacturers of electric cars. And we all know how many of those there are clogging the streets and highways.

Its greatest success this year was securing a load of cash through a private placement, shortly after the PR and investor overreaction sent the stock through the roof. Since then, it's been the same old thing: promises of great potential for products and processes. If these great products and processes ever reach market, they'll have to compete with established products made by established companies such as Genzyme (Nasdaq: GENZ  ) , DuPont (NYSE: DD  ) , and Lyondell Chemicals (NYSE: LYO  ) .

Not that this doesn't make for great drama. In addition to the recent exit of the firm's independent auditor, there are lawsuits and ex-insiders posting their not-entirely-sanguine thoughts on the company on public message boards.

There's a lesson here, Fools. What goes up like a rocket eventually rains down like meteoric shrapnel, especially when the only fuel to keep things afloat is overhyped hope. The next time a "big news" press release rolls out, take a deeper look. Start with that picture.

For more cutting-edge Foolishness on Altair:

Seth Jayson is always pretty skeptical about the next big thing, especially when it wants access to his wallet. At the time of publication, he had positions in no company mentioned here. View his stock holdings and Fool profile here. Fool rules are here.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 496423, ~/Articles/ArticleHandler.aspx, 10/1/2014 4:51:10 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement