Despite being an ugly situation, you have to admit ZAPZ has been a volatile and exciting stock to trade over the past two weeks.
The previous BLOG entry on ZAPZ was one of my better calls in 2005. Click here if you want to read it. I suggested several strategies for dealing with the drop in the stock. I suggested to not sell and wait for a rebound if you wanted out. I also suggested traders might consider a high risk buy for an oversold situation.
I followed my own advice and made a tidy score. Note in comment #6 where Ray believes the stock is a good buying opportunity, I respond by disclosing I had purchased 20,000 shares for my own account at $.95. I simply figured the company would be able to come back with something positive, and the stock had a good chance of rebounding.
Yesterday, I sold 10,000 at around $1.45 and 10,000 at about $1.55 for an outstanding two day profit. I haven’t had one this good in a while.
I would suggest those who took my advice and bought for a short term trade follow suit. Unless the company delivers something unprecedented, my guess is the stock will take a breather for the time being.
If you have lost faith in this company thanks to their recent media blunders, in my view now would be a good time to take your loss and get out.
I am not saying I believe the company will fail. While I view this as a high risk situation, I still believe the company has a window of opportunity to get thousands of Smart Cars into the publics’ hands over the next 18 months, and at the same time establish a working relationship with a number of car dealers nationwide to help sell their other products.
I don’t know whether they will be able to pull it off or not. I know there are many naysayers who believe the car is too expensive or too dangerous, and the approval is only for ’03 cars. The car is probably overpriced, but if it’s a hot item that people want, they will buy regardless of whether it makes sense. Also, I believe they will get the approval to sell later model vehicles.
I just think it is a very interesting situation, and an interesting speculation. In addition, you have the benefit of a stock that moves, and not just down. Most microcaps have been simply grinding in a range over the last several months, putting everyone in a complacent state of not caring. If you’re good at it, ZAPZ could be fun and profitable to trade.
Special thanks to the Smart Car CEO – without his comment I would never have seen the stock trade under $1 and gotten such an outstanding trading opportunity.
If you like the company, and are looking to buy or add to a position, I would wait for a pullback at this point. The next leg up will be fueled by an announcment they have found someone to sell them cars, if they can find someone. In the interim, the stock will probably pull back.
As always, your comments and questions are welcome- this is intended to be a forum for both sides of the story.
I believe this to be optimistic news for all concerned. STATUS OF PENDING VEHICLE IMPORT ELIGIBILITY PETITIONS 2005 SMART CAR COUPE AND CABRIOLET ELIGIBILITY APPROVAL [ May 31, 2005 Vehicles Smart Car, make and model Coupe and Cabriolet, year 2005 and type passenger car Registered Imported Name and number… G&K Automotive Conversion, Inc. 90-007 Complete petition received date 5/17/2005 NHTSA Docket number… 21334 Status number 7 denotes…Currently being processed For G&K Automotive Conversion/Zap to get 2006 approval will be a matter of paper shuffling.
Editor: Thank you for the contribution. I expected this was coming.
The market seemed to love the news about Zap’s Smart Car US dealerships, sending the stock up 83% from $0.90 to $1.65 Now I wonder how much higher it will go when Zap announces that they have issued purchase orders to buy thousands more Smart Cars from European dealers?
Editor: As I stated in my last BLOG entry, I believe the stock is more of a short term sell technically. If you are a long term investor it all means nothing. If they announce a deal to get a substantial number of cars, all bets are off. That’s the event the market wants to see to take the stock to the next level.
Guest Lecture by ZAP Officers Sparks Research at UC Davis Institute of Transportation Studies Monday June 13, 3:02 pm ET ZAP CEO and Company Advisory Board Chairman Call for Creation of Advanced Study Institute to Accelerate Technology Solutions to Global Social Needs DAVIS, Calif.–(BUSINESS WIRE)–June 13, 2005–ZAP (OTCBB:ZAPZ – News), pioneering the next generation of advanced transportation and energy technologies, has announced that ZAP CEO Steve Schneider was a guest lecturer at one of the nation’s top university transportation programs recently, where he led discussions focusing on the globalization of advanced research to further the cause of sustainable development. Mr. Schneider was invited to lecture at the University of California at Davis along with CC Chan, a prominent authority on transportation and energy engineering technology and Chair of ZAP’s Advisory Board of Directors. The pair addressed students of the Transportation Technology Policy Program (TTPP) at the UC Davis Institute for Transportation Studies (ITS). TTPP is a graduate course sponsored by the United States Department of Energy. Dr. Chan is Engineering Chair at the University of Hong Kong, and a noted author on electric transportation and Co-Founder of the World Electric Vehicle Association. He delivered a presentation on the state-of-the-art in clean vehicle technology and the importance of globalization for research and development, highlighting many of the environmental, economic and social challenges facing the world today. Dr. Chan and Mr. Schneider provided a business and technology overview of ZAP, a pioneering company in the field, as a case study on the business opportunities that exist to make positive changes on society through the commercialization of advanced automotive technologies. Mr. Schneider outlined the multi-billion dollar global market for the next generation of fuel-efficient automobiles, specifically low-emission internal combustion, electric, hybrid, hydrogen, bio-fuels, and other advanced fuel technologies like CVT — Continuous Variable Transmission. ZAP plans to launch an automobile distribution network that specializes in advanced transportation technologies. Dr. Chan highlighted discussions with three leading technology researchers and academics at UC Davis: Vice Chancellor of Research Barry M. Klein, Ph.D.; Institute Director Daniel Sperling; and Andy Frank, Director of the UC Davis Future Automotive Technology and Engineering Center for Hybrid Electric Vehicles. In the discussion, Dr. Chan proposed the creation of an International Institute for Advanced Study, citing a similar program founded in Princeton. “An opportunity exists today to use technology to balance the needs of our environment with the needs of our economy,” said Dr. Chan. “The foundation of this new Institute would join together top-notch experts from around the world to nurture creative ideas while taking a global view of our economic and environmental needs. We can apply the best thinking, the best technology from around the world to find commercial solutions that move society towards sustainable development.” “The situation in Asia mirrors the world,” he added. “We must meet the challenge of sustainable growth with the technological opportunities that are just above the horizon. I believe that we have an opportunity to integrate the economic and technological needs of East and West in an economic model that can benefit everyone.” The UC Davis Institute for Transportation Studies is known for expertise in travel behavior and transport systems modeling, to prepare students for transportation decision-making of the future. The Institute partners with academic and research centers on and off campus, and with industry, government, and nongovernmental organizations around the world. ZAP said it has entertained discussions of cooperative research projects and grants with the University. Mr. Chan and Mr. Schneider discussed the possibility with university research official Daniel Sperling, including possible programs such as a “Big Bang” competition that would help students explore business opportunities targeting emerging technologies. Professor Chan called a summit meeting of ZAP’s top advisors and board members at ZAP World Headquarters in downtown Santa Rosa, California, to pursue the issue.
Editor: I’ll put this one up, but I generally don’t like these kinds of postings. People can read the news for themselves. I want to read other people’s thoughts, both on the negative and the positive side.
I love the Automotive News story headline this week “ZAP GETS ZIP FROM SMART” will the next headline be ” STOCKHOLDERS FINALLY GET ZAPPED BY ZAP” I calculated the annual fuel savings from driving a smart-$25K- 10,000 mi per yr (37 MPG CITY) vs a Ford Focus $11K- (26 MPG CITY)-it amounts to less than $300 per year. It would take many decades to cost justify the car. I read that a Tulip bulb cost the equivalent of $46,000 during that BUBBLE.
Editor: I love this BLOG- people either love or hate this stock. Right now, I love because I made a great trade. Next week I could hate it.
If you ask someone in Europe what their gas mileage is, they would say it varies from 35 mpg to 65 mpg depending on how conservative they drive. In any case, 37 mpg is certainly not the average, it’s higher than that. I expect Zap will get a retest from the epa and correct the skewed 37 mpg.
Editor: I don’t think it really matters if they can sell cars. Perhaps a higher EPA rating will help them sell cars. I can’t say for sure.
Zap just listed a smart car on Ebay and it already has 20 bids: http://cgi.ebay.com/ebaymotors/ws/eBayISAPI.dll?ViewItem&item=455684 2599
Editor: I’m sure the company will let everyone know what it sells for.
I see a brand new smart car in ebay for just $9.10 ! (just pay for the fuel it says)…can’t help wondering ‘what is the catch?’…will it take $30,000 to modify it to U.S. EPA standards?
Editor: Buy if for $9.10 if you can. What a deal- I believe it will arrive already modified.
Bloomberg News article ” Smart Cars may be sold in U.S. by ’07 ” It appears that Daimler is revamping their production to build it for US regulations and will probably be selling the Smart Car themselves through the M-B Dealerships. I guess this news really zaps our ZAPZ ! Oh well, time to move on and flush this one.
Editor: Can you blame them- now that they know there is a huge market for the product. I don’t know if it ZAPs Zap on the Smart Car. As I have been saying- they have a window of opportunity- if they can’t jump through it, they are zapped.
I understand that Zap has ONE BILLION $$ WORTH for SMART cars in “SOLD DEALER ORDER” status . Information that I get from the dealers I have contacted is that reorders with a customer deposit, number in the hundreds-not thousands. Sales of the forTwo are dropping in Europe-Netherlands 2003-3,000 cars, 2004- 1700 cars. There are now 19 mini cars in Europe priced from under 9,000 Euros-the most recent from Toyota,Citroen & Peugeot. A re- hash of the 1998 smart car for 2007 just won’t cut it in this newly very competitive segment
Editor: Thanks for the contribution. Time will tell on this one.
Renault has a basic type car for around 6k. They have back orders, too. They bought a failing Romanian car manufacturer, Dacia I think, and retooled to make the Logan. I wonder if ZAP can compete.
Editor: Lots of people are talking about who they might compete with- I’m sure there are a number of manufacturers that have microcars that could be imported. Right now, I believe they are competing with themselves to figure out a way to get 15,000 cars in the next year.
Caught the tail-end of Andy Rooney on 60 Minutes Sunday. He was driving a Smart car. He had reasonably positive comments, but noted that it was not able to be purchased in the US. There were size comparisons to other standard small cars (Honda, etc) Decent, though brief, glimpse of the car, engine, “trunk (?)” for those us looking for something to raise the public’s view of the car. In a segment of parallel parking difficulty, he resolved it by perpendicular parking in a small space.
Editor: Hard to believe Andy Rooney can still drive a car. However, parking perpendicular is a kind of a cool feature of the Smart Car. We’ll see what happens.
This Andy Rooney piece was orginally broadcast in August of 2004-in it he mentions that the car gets better than 40 MPG-not 60 MPG. The issue of perpindicular to the curb parking is not legal in most areas-remember that the smart at 98+” is longer than a Hummer H-1 is WIDE-(the military truck) I have a picture from my trip 2 weeks ago to Stuttgart of a smart with a parking ticket on it for just such a violation. Why doesn’t Zap have a list of dealers?? I read that they have imported fewer than 100 cars and have about 125 dealers-don’t forget the 2 dealers in RENO-I wonder how many they have set up in North Dakota?? When will they be legal for sale in California and NY-there must be at least a few hundred people willing to pay $25,000 to $29,000 for a car that gets 37 MPG as tested by the EPA
Editor: thank you for the contribution.
I read some comments to the effect that Zap had the potential to be the next Honda and that the stock could be worth from $15.00 to $20.00 a share-Honda is first and foremost an engineering company-Zap is a marketing company and ZAP does not produce any products. G&K Automotive conversions of Santa Ana CA has done all the certification work on the smart car-to call the smart car “Americanized by Zap” is not accurate. The only companies who can modify a non complying imported car are Registered (with EPA and DOT) Importers. The idea that Zap can get a “TIER 1″ manufacturer to modify the cars wouldn’t be possible unless they were also Registered Importers. I have not yet read a real road test of the smart by a US magazine-they have vaguely reported the quirky handling and the 37 MPG fuel economy. The idea of the car is great, but the world is changing and 3 STAR crash ratings don’t cut it in a world where 4 and 5 stars are the norm. SMART CAR FEVER is sort of like dreaming of being married to a sexy movie star-great fantasy but you probably couldn’t deal with the reality.
Editor: To paraphrase Al Davis: “Just Sell Cars Baby”. All this debate on the viablility of the Smart Car is very interesting, but I just want to see them obtain and sell cars. As for being the next Honda- the metaphor doesn’t really apply as you suggest. As for having a relatively potent business model in the alternative energy transportation business, that is viable.
What has happened to Zap’s stock? I am unable to locate it on the exchange. Do they have a new symbol or has trding been suspended?
Editor: They relisted under this wierd dual listing with the Pacifiic Stock Exchange and ARCA- it still trades under ZAPZ, but quotes are corrupted by many providers. You can get a quote at Yahoo!, but the .ob at the end is gone. The stock is currently trading at about $1.25.
The reason for the change from over the counter trading was stated as to make ZAP stock available to the institutional investor . ZAP states that they have sold more than 90,000 “vehicles” in 75 countries. I read on one of the stock analysis sites that Mr. Schneider owns 25% of all ZAP shares and Mr. Starr another 10% I would imagine that the warrants would add to that proportion significantly. I wonder if it would be possible to propose an independent audit to verify the quality of the 2 BILLION in sold dealer orders that the company has on hand?? Are there individual customers who have actually put a sizable cash deposit down and with a proposed delivery date?? (That is what the industry defines as a sold dealer order)
Editor: I know what the purpose was, but I believe it backfired. It won’t make them a different company, and now investors have a harder time getting accurate quotes. Just show me the cars, and get them converted and sold.
I was surprised to learn from several government sources that Zap’s “AMERICANIZER” of the smart fortwo- G & K Automotive conversions, agreed to pay a $ 10,000 penalty to the EPA to settle allegations that G & K ” imported improper vehicles, submitted inaccurate certificates of conformity and improperly released vehicles for use on public roads” according to EPA. Perhaps that is one reason why, as of this date, the 2005 smart is not yet certified for sale in the US.
Editor: Not sure about that issue, but $10k to a gov’t agency seems a pretty minor slap on the wrist. I’m not really too concerned about 2001 or 2005. It simply doesn’t matter if they can’t get the cars to fill their orders. Show me the cars. That’s my attitude. All this other discussion about the minutia is just a waste of time.
The symbol changed to ZP on 7/7/2005 as was announced on 7/1/2005
Editor: It’s wierd- I still get quotes on ZAPZ, but they conflict a little with ZP
We know that they don’t have the cars now, we also know that the 2005 smart fortwo is not legal for sale in the USA and we also doubt that very many people will be willing or able to spend from $25,000 to $29,000 PLUS tax & license to buy a 2 seat car that gets an EPA rated city & highway 37 MPG. In my conversations with the marketing people at smart I have gotten the distinct impression that they really don’t care about the US market. Year to date sales in Canada for the 60 PLUS MPG DIESEL fortwo is less than 2,000 cars and sales in Mexico for the same period is less than 200 cars. If ZAP wants to provide a high mileage car, they should certify and import the smart fortwo diesel that can actually get 60 to 75 MPG, and it can run on vegetable oil or Bio-Diesel. Price it from $16,000 to $18,000 tops for the Cabriolet and ZAP would have a winner.
Editor: You spend a lot of time bashing this company. While we appreciate the input, we all realize it’s a high risk situation predicated nearly 100% on the orders they have in hand, and whether or not those orders would still be good if they could get the cars.
Everyone who owns this stock needs to recognize that it is possible they could lose all of their money. That having been said, we will all find out what the future holds between now and the end of the year.
All this talk about possible sales, high vehicle prices, MPG, etc. does nothing to explain the down $0.32 to $0.96/share closing on July 15. Without better timely information, I can’t decide weither to buy more or sell for a loss.
Editor: I’m not sure where you are getting this $.32 number- the stock closed at $1.18 yesterday. Perhaps you are looking at the old symbol- it is now ZP.
I am curious why no one has mentioned SMART AUTOMOBILE website and at the SMARTCAR of AMERICA site it mentions editorial about soon to be released news looks like this is it but something odd about stocks price ( i own shares in zapz)
Editor: I’m not sure what site you are alluding to. Include the web address, and I’ll have a look. On the stock- it now trades under the symbol ZP- the move was a little confusing.
SMART AUTOMOBILE web address[ http://www.smart-usa.com/ ] The DMC could stand for ? motor carin a forum i read daewoo motor car there was mention of a plant in europe extra capacity ..? :>)
Editor: I don’t know what it stands from.
Dont know why the stock isn’t responding to today’s news that the ’05 version of the car has been approved for import eligibility and cars are starting to roll into the US but I’ve been watching this stock long enough and I’m jumpin’ in. I don’t see any signs of fraud; maybe a little poor judgement but not fraud. They’ve gotta get these cars ‘Americanized’ and rolling out the door to buyers asap and I think it is starting to happen now- finally. I’ve been in the stock game a long time. This is no worse than an emerging biotech. Everyone has gotta weigh the risks and rewards for themselves. As for me- all aboard! Joel S.
Editor: Lots of different viewpoints on this one. I simply believe if they can get the cars and sell them, they will have a window of opportunity to make some serious money.
http://www.smartcar-usa.com/ this web address will take you to smart automobile website. smart us/ca compliant by DMC americanized by zap
Editor: Thank you for the contribution.
I see that the car has been cleared by the DOT but no mention has been made on when the car will clear EPA or California Air Resources Board for the ’05 model. Mercedes Benz said that the current car (the mark 7) which has been for sale in Europe for more than 2 YEARS “could not be modified to meet the US EPA reg’s”. I am really interested in the DIESEL model which can actually get from 60 to 75 MPG.
Editor: Hopefully they will end up importing the diesel version. I believe the EPA and Cal will be coming soon.
Any news on when the current model smart car (2003-2004-20050 will be cleared by the EPA and the California Air Resources Board? I spoke to a source at the EPA today and it hasn’t happened yet. I read in the March 2, 2005 LA Times that Zap was requesting a re-test of the car in hopes that the mileage would improve from 37 MPG City & Highway. The European test rating for city mileage is a shade over 39 MPG. I’m really waiting for importation of the 60+ MPG Turbo DIESEL smart forTwo which can run on non fossil based fuels. Who will be the first company to market a 100 mpg Diesel Hydrid. smart showed a prototype 100 mpg forTwo diesel hybrid at the 2001 Frankfurt Auto Show-a fact that was lost in the wake of 9/11
Editor: John- thanks for your question and other materials you have sent our way. Your involvement is appreciated. I don’t have any answers for you with regard to retesting. As you well know, to me this stock is all about getting cars and delivering against the orders. Despite the doubters, the company has demonstrated it can get regulatory approvals. It just takes some time. Can they get cars? That’s what I’m waiting to learn.
Is there hope with a DCX deal now after-all? The chief of Mercedes just quit… http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7BAE4C3F5E%2D8683%2D4AE3%2DB9B5%2DE186648E94C7%7D
Editor: The company has not been in contact with me lately. Hoping to hear some concrete 411 on when they will have cars to deliver.
There will not be a deal made between ZAP and DaimlerChrysler. People with a background in the auto industry know that a manufacturer will not deal directly with a third party like ZAP. Has anyone asked where ZAP would get the money to purchase these cars-D/C had some question about the credit worthiness of ZAP, among many other issues. How can they sell the cars even if they could get them? The 2003, 2004 or 2005 cars have not been cleared either by EPA or the CA Air Resources Board. My guess is that D/C will sell smart either to Nissan or Peugeot/Citroen. The French Gov’t already has a 25% stake. The next smart forTwo will probably be 10′ long with front wheel drive, a 1,000 cc motor, CVT transmission and occasional seating for 2 children. There is no way that they can get a 5 star crash rating in an 8′ long car and the market for 2 seat cars is very limited. In Europe the gas car gets 38+ MPG in the city. ZAP hasn’t said when you could get this mythical 60 MPG (down hill with a tail wind?). The US EPA says 37 MPG City and Highway-Who would you believe-a car salesman or the scientific test result by a US government agency. The LA Times says the smart gets 9th best fuel economy-similar to a Honda Civic.
Editor: Certainly there has been no concrete evidence coming from the company that they will be able to get cars in the quantities they need to get this company moving in the right direction.
What do you make of the new deal with OBVIO! from Brazil… 50K cars in a three year period after the initial delivery. I could not find any information that talked about certain milestones that would have to be met that could jeopardise the 50k delivery. Have you heard of any criteria that could cause problems? If it all works out by the end of 2007 as projected, that they may be behind to the competition.
Editor: I don’t know what to make of it. I have lost touch with the company, and have become convinced the whole Smart Car fiasco was just more a less a stock promotion. Moving on to this new one is a tacit admission they are abandoning $1 billion in orders. I like companies that deliver on suggested results.