Advanced Battery Technologies, Inc. (OTCMKTS:ABAT) Wants to Get Noticed Again
A few years ago, Advanced Battery Technologies, Inc. (OTCMKTS:ABAT) looked like a really solid investment opportunity. The stock was traded on NASDAQ and the SEC filings suggested that the company is moving forward. According to the 10-Q covering the second quarter of 2011, for example, the revenues amounted to around $31 million while the net income came in at a little over $10.2 million.
There’s no denying the fact that the figures looked good, but not everyone was convinced. Some people who disclosed a short position in the stock published more than a few articles alleging ABAT of various fraudulent activities. They even said that the financials in the SEC filings didn’t reflect the company’s actual operational results. None of the allegations were conclusively proven, but the attack did have a massive effect on the stock and at the end of 2011, ABAT was de-listed from the NASDAQ stock exchange.
Not surprisingly, once the ticker found itself on the OTC Markets, it started behaving rather erratically. There were a few spikes, but they were followed by some scary drops and on the whole, ABAT was not what it used to be.
It still isn’t, but over the last few weeks, we’ve seen some interesting moves. The performance is far from consistent, but the price did manage to jump from under $0.60 at the beginning of the month to Friday’s close of $0.70 per share. The volumes are also growing which means that people might be starting to pay attention to the company once again.
The surge of interest was first spark by a press release issued on October 28. In it, the management team explained that ever since the de-listing of the stock from NASDAQ, they’ve been working hard on pushing the company in the right direction and they also claimed that as a part of their future growth plan, they want to re-list the ticker on the national exchange within the next two years.
Two more optimistic announcements followed on November 5 and November 11 and on Thursday, ABAT also said that they plan to buy and cancel around 5 million shares over the next twelve months. According to Zhiguo Fu, ABAT‘s CEO, the buyback program should help the stock reach more stable levels which is extremely important because in his view, the current share price does not reflect the company’s intrinsic value.
This is where a question pops up: “What is ABAT‘s intrinsic value exactly?”.
Unfortunately, we don’t know. Shortly after the 2011 turmoil, ABAT stopped adhering to its SEC reporting obligations which means that the most recent financial information is now almost three-and-a-half years old. Last year, ABAT did report some results for the year ended December 2012 on their website, but it should be noted that they’re coming from internal audit which means that if you want to jump in based on them, you will just need to take the management team’s word for it. And as we mentioned already, not everyone is willing to do so.
ABAT said that all the reports should be out before the end of Q1 of 2015. Until they are, the stock remains a really risky proposition which means that proceeding with caution might not be a bad call.
