Can an Upcoming Court Decision Bring This Zombie Stock Back to Life?

There is an old Irish blessing that begins "May the wind be always at your back." Maybe the wisdom and luck of the Irish elders was foretelling of another story—namely that the wind sector will emerge as a credible energy source globally. This leads us to Massachusetts-based American Superconductor Corp (NASDAQ: AMSC  ) , a name that is valued 15 times lower than it was in 2010 when wind was slated for more upside. The economic crisis facing the U.S., the delay in adopting wind, and an epic battle regarding alleged stolen technology by China's Sinovel havw plagued AMSC. However, recent industry developments to move ahead without the PTC by companies like Siemens (NASDAQOTH: SIEGY  ) and Enel Green Power  (NASDAQOTH: ENLAY  )  only solidify that wind power should once again be on investors' radars.

There is certainly risk in going long AMSC, but if it can show that Sinovel stole AMSC's intellectual property, shares of AMSC could be worth the risk considering it serves both the utility and industrial markets and provides the brains and technology designs for more efficient wind turbine power generation. Additionally, AMSC, once considered a General Electric (NYSE: GE  ) takeover target, is seeking $1.2 billion for its claim against Sinovel, and that is nearly the full 15 times higher valuation the company was trading at in 2010. Even a fraction of that settlement could see shares of AMSC vault higher, but I again want to point out this is a risky idea. 

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  • Report this Comment On January 10, 2014, at 11:28 AM, Eohippus617 wrote:

    They have proven that Sinovel stole their inellectual property and it has not mattered. the Chinese government has not cared and that is where the case is being tried.

    I am much more interested in their possibilities with the HTS Wire and the Degaussing project they are doing for the Navy- that is where the opportunity lays and you did not even mention them.

  • Report this Comment On January 15, 2014, at 10:32 AM, jeffin wrote:

    There is no longer any "alleged" element about this case. The "alleged" thief was working in AMSC's Austrian branch. when he sold the codes to Sinovel. He was subsequently found guilty (he confessed & provided evidence pointing to Sinovel's role), was sentenced to prison, has served his time, and has been released.

    There is no issue about whether he and Sinovel are guilty of the theft. The only issue is whether China is going to allow AMSC to bring their civil suit against Sinovel before a Chinese court. The industrialized world is watching to see whether China is going to offer protection for Intellectual Property rights. China's status in the WTO is at stake.

  • Report this Comment On January 24, 2014, at 7:53 AM, cica0123 wrote:

    Please take a look at AMSC contract FDCG08045-01, from mid. 2008, you'll see the fact that AMSC sells core components with software included. There is also low voltage ride through function in the contract.

    Some poor events from mid. 2011 are used to cover terrible mistakes of the company management and to find escape formula through the courts.

    If the evidences still exist, someone might wanna have them published, to bring some fresh wind in the case. There is always a way for the truth to survive ;-) ...

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