Everyone who follows activist short selling should check out Spruce Point Capital Managment’s research on Ballard Power Systems (BLDP). It’s a small company based in Canada with little institutional or media coverage to speak of. In fact, it’s majority owned by retail investors who have experienced a more than 100% return over the past year – if they got in 12 months ago that is.
Spruce Point, a highly-respected although small shop run by former investment banker Ben Axler, hired some investigators in China and determined that Ballard’s joint venture partners were dubious, engulfed in eventual cash crunches or riddled with related party transactions that benefitted their owners. (no surprise for China companies) The stock dropped 20% after Spruce Point came out with their report even though some bulls continue to blindly push the stock on Twitter and elsewhere like their financial future depends on it – because it probably does!
Ballard eventually responded with a press release announcing the date for their upcoming earnings announcement and a bullish statement by their CEO. The stock went down again, most likely because Ballard didn’t specifically address any of the accusations in the Spruce Point report. We’ll see what happens.
Randy MacEwen, President and CEO said, “As we noted on our last quarterly conference call, with a substantial order backlog and order book of expected deliveries over the subsequent 12-months, Ballard was well positioned to deliver strong full-year 2017 results and have a solid set-up for 2018. In addition to confirming strong 2017 results on our March 1st conference call, I am also looking forward to providing a business update and outlook.”