ZAPZ got absolutely clobbered at the market open today, but has since started to make a comeback. I believe the market misinterpreted some information that had surfaced on the company. In this “sell now ask later” environment, it’s not surprising.
ZAPZ published a news release very early in the day stating it had sent a purchase order to Mercedes Benz for $1 billion worth of Smart Cars.
Reuters then carried a news report stating the Smart Division of MB was not even aware of the order.
Marketwatch then carried a one sentence news release stating MB’s Smart division would not be delivering any cars to ZAPZ.
ZAPZ then countered by publishing a press release stating that a number of distributors of the Smart Car had committed thousands of cars to ZAPZ- giving the market comfort that ZAP would be able to get supplies, and sending the stock back up from absurdly oversold levels.
ZAPZ made a low of $1.35 in early trading, and as I am writing this BLOG at 10:30 AM Pacific, the stock has rebounded to the $2 level.
Well- one thing for sure- you can’t say this stock is boring.
As I understand the real story, the relationship with MB and their Smart Car division is still up in the air. ZAPZ CEO Steven Schneider visited with the MB parent company, and started the ball rolling in an attempt to make an arrangement directly with MB to purchase the cars.
At this time, I’m pretty sure parent MB has not said yes or no, and subsidiary Smart didn’t really know what was going on at the parent level.
ZAPZ could be simply trying to stir the pot and force MB into a decision. The poor performance of the Smart Division has been well documented, and that division can ill afford to turn down a $1 billion order.
I’m planning to publish a full news letter once I speak with Steve Schneider and learn all the facts. In the meantime, I hope some of the ZAPZ lovers were able to pick up stock below $1.50. At this point, I would hang in there and wait for developments.
Your comments and questions are welcome. I’ll do my best to respond to questions with facts. Opinions are welcome on both sides of the fence.