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Tuesday, April 12, 2005

A Nanotech Mismatch: Toshiba vs Altair

Last week, Altair announced that Advanced Battery Technologies had licensed the company's nanomaterials for its lithium-ion battery product line. The news resulted in a 15 percent increase in Altair's stock price and an astounding 278 percent increase in Advanced Battery Technologies' stock. (Full disclosure: I do not own stock in either company). The MotleyFool ran an excellent article on this topic (which I strongly encourage my readers to read for themselves) but I'd also like to add my two cents on this news.

As readers of this blog know, I have never been high on Altair -- for reasons which are covered in the related links section below. To summarize, however, I believe the company's only demonstrated proficiency has been in delivering press releases that offer the promise of future benefit without actually delivering anything of real substance. As proof, I would remind my readers that the company has no revenues and it has yet to sell one of its products.

Recently, the company has found some success (which I define here as articifically inflating its stock price) in hyping its lithium ion battery nanomaterials--which company offcials claim will lead to rapid recharge rates and longer shelf lifes for batteries. This might be true but I would like to bring to investor's attention this article about Toshiba's "Nanobattery."

Here's the bottom-line: Toshiba's battery recharges to full capacity in just a few minutes, it has a high-level of storage efficiency, can be recharged up to 1000 times, operates in extreme temperatures, and is effective enough to be used in hybrid automobiles. More improtantly, Toshiba has stated it will be using its new battery in commercial products by 2006.

Investors of Altair must ask themselves this question: Is the company's lithium ion technology so superior to Toshiba's "nanobattery" that it can effectively overcome Toshiba's excellent reputation, its well-known brand name, as well as its marketing and distribution strength?

In my opinion the answer is no and I think this reality will be reflected in a serious drop in Altair's stock price--which today stands at $3.58 a share--in the months ahead.

Jack Uldrich

Related Links:
Altair: Fooling the Fools
Is Altair all Hot Air?