A123 Needs To Recharge

What is there to say about the high-tech battery sector today? Advanced lithium batteries are still the most likely clean-tech option to get traction in the auto sector, but large-scale rollouts are still off in the distance. In the meantime, investors have certainly turned on the smaller, riskier names in this sector and sent the stocks down while the overall market has done alright. 

The Quarter that Was
A123 once again came up short on the revenue line this quarter, as sales totaled a bit under $23 million. Transportation revenue (which is close to half of the total) was flat sequentially, while consumer revenue and service revenue both grew nicely. The company did not record any electric grid revenue this quarter, and the company shipped 10% fewer megawatts on a sequential basis. 


To continue reading, please click the link to Investopedia:
http://stocks.investopedia.com/stock-analysis/2010/A123-Needs-To-Recharge-AONE-NAV-PC-HEV-JCI0812.aspx

Financial Edge: The Biggest Corporate Image Catastrophes

It is a dubious testament to the well-greased PR machine of the corporate world that the general public tends to accept all manner of corporate malfeasance and blundering with barely a second look. But despite spending millions of dollars on PR, some companies still manage to muddy their reputations with tone-deaf responses to trouble. Let's look at some of the most egregious PR offenders of recent days.


1. BP
BP's (NYSE:BP) handling of the well explosion and subsequent oil spill in the Gulf of Mexico is going to go down as a classic case of horrible corporate public relations. Even though BP tried to stop the leak as soon as physically possible, tone-deaf comments from the now-former CEO quickly led to a thundering backlash. Much as Exxon Mobil (NYSE:XOM) never completely out-ran the legacy of the Valdez oil spill, it's likely that BP will always be stained by how it handled this accident. (For more insight on how much this type of disaster can cost, see The Most Expensive Oil Spills.)

2. Goldman Sachs
When the Blues Brothers told people they were on a mission from God, it became a classic line of cinema. When the CEO of Goldman Sachs (NYSE:GS) said words to basically the same effect, he became People's Exhibit A for the hubris of Wall Street. Later, when the public learned that Goldman was allegedly misleading some of its customers, paying huge bonuses and essentially lecturing the government on how things ought to be, the public said "enough". Truth be told, Goldman did not do anything new or anything that its peers have not done - it was just clumsy enough to do it in front of microphones at precisely the time when the public wanted contrition and modesty. (Find out more about why Goldman came under fire in The Goldman Sachs Accusation Explained.)

For the full column:
http://financialedge.investopedia.com/financial-edge/0710/The-Biggest-Corporate-Image-Catastrophes.aspx

No Bailout ... no real surprise

I have to confess that I'm surprised that so many people seem surprised that the auto bailout failed.

First, you have to remember that the TARP wasn't wildly popular at the time and the logic behind the auto bailout was even more tenuous.

Second, you've got to think that there are some p*ssed off Republican senators looking to settle some scores and show (in a very public fashion) that they're not dead yet, not going away, and not going to rubber-stamp everything the new Congress/Obama administration wants. So, I look at this as a shot across the bow (or, perhaps, into the bow).

Third, and in in line with the first point, look at how the TARP has worked out. Paulson (and Bernanke) went to Congress and said "give us a boatload of money and minimal supervision ... and we're going to use the bulk of the money to buy distressed assets off of bank balance sheets".

In practice, though, we've all seen that the truth is far different -- the TARP has been used as a bank stabilization fund. Now, politicians lie all the time, but they really don't like being lied to (in other words, so long as they're the ones doing the lying, everything is kosher for them). So, I've got to think that a lot of Congressmen are/were thinking "hey, you fooled me once..." and are not inclined to tick off their constituents a second time only to see another BS proposal go south.

So, what do the auto companies do now?

If things are as bad as they say, they go bankrupt. And maybe that's not so bad over the VERY long haul (in the short run, it's bad for all of us).

There have to be rewards for success and consequences for failure, and bankruptcy is arguably the ultimate consequence for corporate failure. IF the afflicted automakers can seize the opportunity (and get strong, forward-thinking management in place), then they can restructure their business and find a cost structure, product line up, and business philosophy that makes sense.

If not ... well, life goes on.