ZAPZ Rolling Back Uphill

ZAPZ has reversed course is now rolling back uphill. Today, before the market opened, ZAPZ announcedorders for the Smart Car had exceeded the $200 million mark. http://biz.yahoo.com/bw/050322/225316_1.html

I believe the market wants to know how the company is going to deliver all these carsbeforeit takes the stock to new highs. I believe the market wants a timetable for delivery, and an understanding of how it will be done.

For those who have been concerned about the dilution issue, I have now spent enough time with the company to know it is not a bigissue with this company. Warrants were extended so there wasn’t a non-cash hit to earnings if they allowed them to expire and then issued new ones. Nearly all the outstanding warrants are held by insiders, and not convertible into free trading shares. I will have an accurate table soon. There will be some supply, but not nearly as prolific as suggested in past commentary.

Technically, the stock now looks pretty good if you sort of ignore the anomoly of the stock falling below the 61.8% retracement level. This often happens. Market makers and traders know people look at these levels. Sometimes, they take the stocks just below the threshold to shake out all the weak hands.

My view: Despite a very tough market environment, I believe there is a lot of money to be made in this one if you believe the company will figure out a way to deliver on these orders. That is your risk. If you are willing tobet they can do it, the stock is a buy.

Orders and inquiries are flowing into the company daily. This is just the beginning. If they tell us how they are going to deliver, the market might go crazy.

41 thoughts on “ZAPZ Rolling Back Uphill

  1. Do you expec the EPA to approve soon and for ZAPZ to get complete approval for retrofitting? I don’t think that will be a problem Manufacturing- My guess is there will be a announcement on this due to the mention of this being sought in the past 2 PRs. If they get their own mfgr, that will send stock over the top. New vs used and MUCH better margins. Key is to implement smoothly and quickly and have capital. Does that sound right to you?

     

    Editor: The EPA has already approved the retrofitting system. As you mention, manufacturing and delivering is the key here. Once they figure out how it will happen, I believe the stock will trade much better.

  2. Complete approval for retrofitting shouldn’t be a problem and I see this happening soon. Manufacturing- My guess is there will be a announcement on this due to the mention of this being sought in the past 2 PRs. If they get their own mfgr, that will send stock over the top. New vs used and MUCH better margins. Key is to implement smoothly and quickly and have capital. Does that sound right to you?

     

    Editor: I think you have hit it right on the money. If you believe they will find a way to fill their orders, you need to buy the stock right now.

  3. Nice big picture of a cool looking Smart car with headlines predicting a major increase in small cars…front page of Business section of Plain Dealer last Friday (Cleveland)…jt…I agree…I’m holding on to my shares even though I ‘m a little underwater here…perhaps pick up more if this gets knocked down again below 2.50

     

    Editor: if this stock gets under $2.50 I believe it would be completely market driven. Cash at any cost.  I believe this one could trade very well even into the sloppy part of the year if the company can demonstrate to the market how they are going to fill their orders.

  4. How far did the exceed $200 million?

     

    Editor: Order flow is coming into this company daily. I believe they will be way in excess of $200 million based on anecdotal evidence. I believe the stock will trade extremely well once they show everyone how they will deliver on the orders.

  5. did you see the new news out today? ZAP CEO Steve Schneider Discusses Company’s Transportation and Energy Technologies in Online Interview with SmallcapInsights.com Company Chief Outlines Growth Outlook for Company’s SMARTCAR and Other Advanced Energy and Vehicle Products LOS ANGELES, March 24, 2005 (PRIMEZONE) — SmallcapInsights.com, http://www.SmallcapInsights.com, the online source for exclusive commentary, research, interviews and other key investor information, has announced the availability of an online interview with Steve Schneider, CEO of ZAP (OTC BB:ZAPZ.OB – News), a pioneer in the next generation of advanced transportation and energy technologies. ADVERTISEMENT In the audio interview, Mr. Schneider provides an overview of ZAP’s growth and business strategies, and discusses several of the Company’s acclaimed products in detail. Among the products mentioned is ZAP’s innovative multi-use batteries for electronic products that deliver up to four times the power of typical batteries, using unique flex-voltage features to charge or power a variety of devices, including cell phones and laptops. Mr. Schneider also discussed the SMART Car Americanized by ZAP, a fuel-efficient micro-car with unique, eye-catching style that is already a major success throughout Europe. ZAP has announced American demand for the Smart Car appears strong; the Company has already announced surpassing the $200 million threshold in purchase orders from U.S. consumers. The streaming audio interview can be accessed at http://www.SmallcapInsights.com. Registration to listen to the interview is free. About ZAP ZAP, Zero Air Pollution(r), has been a leader in advanced transportation technologies and energy products since 1994. ZAP serves the multi-billion-dollar markets for next-generation transportation and power products through three divisions: ZAP Automotive, ZAP Personal Transportation and ZAP Energy. The Company has delivered more than 90,000 fuel-efficient and pollution-free vehicles powered by gasoline, electric, hydrogen and other fuels to customers in more than 75 countries around the world. ZAP holds exclusive license from Smart-Automobile LLC to deliver the popular European-made Smart Car, a high-efficiency gas vehicle, to the American marketplace. ZAP “Americanizes” the Smart Car to meet U.S. federal and state safety and emissions standards. The U.S. Environmental Protection Agency and the Department of Transportation have approved a Smart Car model Americanized by ZAP for domestic use in 45 U.S. states. ZAP is not affiliated with, or authorized by, smart gmbh, the manufacturer of SMART automobiles, or the smartUSA division of Mercedes-Benz LLC, the exclusive authorized U.S. importer and distributor of those vehicles. ZAP purchases its vehicles from non-affiliated direct importer Smart-Automobile LLC. The Company’s all-electric vehicles include the ZAP Intimidator L.U.V. and ZAP Worldcar neighborhood and urban electric cars, ZAPPY(r) Scooters, Mobility Scooters, Bikes and All Terrain Vehicles (ATV). These products offer convenient, dependable and fun transportation that’s heavy duty, powerful and noise free. The ZAP Portable Energy division has developed a next-generation, multi-use battery for electronic products that delivers up to four times the power of typical batteries to charge or power a variety of devices, including cell phones, digital cameras, DVD and MP3 players, camcorders, and laptops. For more information, visit http://www.zapworld.com. For investor-specific information, including daily and historical Company stock quote data and recent news releases, visit http://www.trilogy-capital.com/tcp/zap. To read or download the Company’s Investor Fact Sheet visit http://www.trilogy-capital.com/tcp/zap/factsheet.html. For recent news coverage of ZAP, visit http://www.trilogy-capital.com/tcp/zap/press.html. To view a video about ZAP, visit http://www.trilogy-capital.com/tcp/zap/video.html.

     

    Editor: Sure- I hope everyone listens to the interview.

  6. If I were GM, Ford or even Daimler Crysler, I would be trying to buy Zap!

     

    Editor: Daimler Chrysler would be the best candidate. Give them a call and tell them to get on it. 

  7. Darrol, Unfortunately I do not have anything new to report. I know things have been sort of slow, but we have been trying to wrap up some real big deals to start the SMART deal finally going. I think that you should start seeing some real big news in the next few weeks. Steven Kim Director of Investor Relations ZAP I think they are very ON TOP of things!

     

    Editor: For all you investors who are reading this commentary- a little patience may pay off. $200 million in orders is too big a number to not find a way to fill. In the US, if the business is there, entreprenuers find a way to get it done.

  8. It’s up 7% so far today. What is your near term price target for zapz? $5?

     

    Editor: If they can find a way to fill the orders for the cars, I believe the stock could go to $10. Since they are not the actual manufacturer, there is significant risk that someone else will find a way to get a similar car to the US Market before they can really gear up for their dealers. If they can get these cars to market, I believe this one is a big winner.

  9. What do you expect ZAPZ to do on Monday in light of their exposure at the auto show in Pomona California?

     

    Editor: I am not too optimistic about any stocks in the short term as you can tell if you read the weekend edition. In the case of ZAP, I am not expecting any thing too spectacular until they demonstrate to the market how they are going to fill the orders. We know they can sell all the cars they can get. If they can get a supply of the cars, watch this stock take off. I know they are working on it, I just don’t know if they will be successful. I believe it is a great speculation.

     

  10. Any thoughts as to how this might affect “entrepreneurial interest” in underwriting ZAPZ’s dreams to conquer the US market with their version of Smart cars? http://www.guardian.co.uk/business/story/0,3604,1450739,00.html. and then this–http://www.redherring.com/Article.aspx?a=11666&hed=Smart+SUV+Might+Not+Materialize. Hmmmmmm…so, editor…what are your odds that ZAPZ can do what they haven’t been able to do before (make a profit)…and do it before DC does it?? Gonna have to rethink this. Steve Kim seems energetic enough (of course, what else is he gonna say??…”well shoot doggone it…guess we’ll just have to shut down”…??)…but can he get it done?? Wonder what the Vegas line on him is?…Wall Street sure ain’t sure he can do it…maybe some entrepreneur is…. Watching With Interest and a Finger ON the Sell Button…jt

     

    Editor: If your links refer to issues relating to MB either stopping production of the car or marketing it themselves, I know what Zap’s response is. They believe they have a 2 year head start on MB in the US market because of the approval process, and they believe they will be able to get the cars because the 2 door was overproduced for the Euro market. So, there’s your risk. I don’t know how it will come out. Somone is going to sell these cars in the US. If it is ZAP, you could make a lot of money. If it’s MB, you won’t.

     

    On the plus side- if they can get the cars the event is not priced into the market in my view. There’s lots of upside. Also, the company has a new CEO who won’t some of the mistakes of the past.

  11. …oh…and btw…technically, the only way the stock looks good is not by ignoring the “anomaly” of the recent Fib dip, but by ignoring the previous spike…jt

     

    Editor: Thanks for the comment- good point.

  12. After todays close, it looks as if this stock could be a bit volcanic and have a short term eruption. The MACD is trying to turn up, both the slow and fast Stockastic turned bullish in a mid-cycle, money flow is on a gradual up-grade, the RSI turned up rather sharply, although the price is up today, the buying pressure was a bit weak but that would account for the low volume (ave volume for a 65 day period is 246,370) In my honest opinion this stock is a “buy if” it opens positive tomorrow and only if the volume is higher than normal for morning hours tradeing. Then the smart money can drive it on up in the late afternoon, this will only be a momenum play and short lived in my honest opinion.

     

    Editor: It could pop tomorrow based on today’s announcement of over $400 million in orders, but I believe there will be no sustained big move until the market knows how the company will get the cars to fill the orders.

  13. Zap currently has orders for 15,000 cars, right? I’ve heard the demand is more like 150,000 cars. Is that accurate?

     

    Editor: As of tonight’s announcement, the acutal dollar amount is over $400 million.  A very rough estimate would be 20,000 cars.

  14. This company has a float of 13.967 million shares with 30.854 million shares outstanding and a market cap of 88.860 million and a net loss of 1.67 a share. Now assuming this company figures a way to fill the 430 million in orders (BIG if) but lets say they do, then their shares should trade at around the 13.00 dollar range with an even P/E, now assuming they make money and their P/E is 5, they should trade in the 70.00 dollar range if they make just one penny a share. Now here is where I love your interminable knowledge on these issues. Can you put this into a perspective, I know I have to be wrong!

     

    Editor: .01 per share in earnings with a 5 PE would equate to a $.05 stock. Since the margins on the car are thin, I don’t believe they will be a super profitable company even if the complete $400 million in sales. Let’ say it trades as a function of sales- 1xsales, which is reasonable for a moderately profitable company, would put the stock at $12 per share roughly if there is no major dilution. Lots of its- bottom line- I believe there is a lot of money to be made in this stock if the company can get the cars.

  15. Where do you think ZAPZ will trade tomorrow in light of the new tally of 431 million? They went from 200 to 431 million in a real short amount of time. Who knows, maybe they’ll annound another 400 million in orders next month?

     

    Editor: As I have been saying, the stock will continue to trade in this range until the market is convinced the company can fill the orders. I believe it is a great speculation.

  16. There is something wrong with this story. I import cars from the US to Canada and on many of them I must change/re-inforce the bumpers to meet the higher speed crash tests required in Canada. Smart cars are available from MB dealers here in Canada without bumper modification, but there is a 3 month wait because of lack of production. Something is wrong with the information being put out by ZAPZ and OTC.

     

    Editor: I don’t agree there is anything wrong with the information. We are guessing about the future, and who knows what is going to happen in the future. According to several reports I read that were independent, MB has overproduced these cars, but it may be the 4 door model no one wants.

  17. Hasn’t MB announced they are NOT going to be sending any cars to the USA, can’t make any money on them.

     

    Editor: The only thing MB has announced is that they are going to decide what to do with the line in the near future.

  18. I see a couple of small cap/penny stock news releasers putting out news on ZAP. Hope this translates to some more exposure/volumn.

     

    Editor: We’ll see. Lots of people watching this one.

  19. What is ZAPZ relationship to DCX? I read an intersting article in the Metro Paper in Toronto and it states that DCX is “delaying the introduction of the Smart Car in the U.S. indefinitely”. Should this have any adverse effects on ZAPZ? The reason I ask is because of this disclosure found on the ZAPZ website. “ZAP is not affiliated with, or authorized by, smart gmbh, the manufacturer of SMART automobiles, or the smartUSA division of Mercedes-Benz LLC, the exclusive authorized U.S. importer and distributor of those vehicles. ZAP purchases its vehicles from non-affiliated direct importer Smart-Auto LLC.” I am inclined to think that ZAPZ could face future competition from DCX if they decide to introduce the Smart car to the states like they have here in Canada. One final comment would be to point out the news released on April 1st of this year by AP ‘DaimlerChrysler to restructure Smart’ Any thoughts or comments would be appreciated.

     

    Editor: I believe I covered that issue completely in the last edition I published on the company. Check the archive section under Current Profiles on the left hand menu bar at the home page.

  20. do you know why zapz is on the sho list?

     

    Editor: In my view, the SHO list is meaningless. Forget about it. DTC is not delivering the correct information.

  21. What is a float?

     

    Editor: It is the number of shares being exchanged by the public. Since stocks go up by supply and demand, it can sometimes be useful to know the number of shares in the public float.

  22. What do you make of the light volume today?

     

    Editor: Lack of interest in the market in general. Nothing to do with the company. If they sell $400 million in Smart Cars, there will be plenty of volume.

  23. The bad news for big fuel guzzling car makers like Ford and GM can only be good news for ZAPZ. It seems like everyday there is more bad news for the majority of the auto sector. Why? Because noone imagined oil prices would go this high and that they are only headed higher. As soon as this small stock is realized by investors there’s no telling how high ZAPZ will go.

     

    Editor: It won’t go any higher until the company demonstrates it can get and deliver the cars. I like their chances, but there are no guaranttees.

  24. I understand that ZAP received $11 million from a Chevy dealership in Fresno for exclusive rights to sell Smart Cars in his county. And I assume there are other dealers willing to make similar deals. If so, this should make a huge impact on ZAP’s earnings, maybe more than their profit margin on the Smart cars.

     

    Editor: I’m not sure if that is true. True or not, all that matters is that they can get the cars.

  25. Time is paramount. Mercedes is now scrambling to bring in the new fourtwo as fast as possible. I believe they might try to bring in the old one fast also. Why? Suddenly they have a goal to make smart profitable by 2007. Interesting…They are operating at a huge loss since inception of the car. How are they going to be profitable? North America. So, the longer Zap takes to resolve the issue of delivery, the less compelling the “gray market” ZAP cars become. Put your stop losses in. But… Again, if Zap delivers, the up side is very, very large. Worth the speculation. Downside risk perhaps $2.00 share. Upside potential, perhaps $15-$20 per share. I’ll take that risk.

     

    Editor: Thanks for the comment. My view exactly. I’m not sure there isn’t a possibility of a deal between MB and ZAP.

  26. Is it any wonder where things are headed? Just yesterday harley davidson crashed. Some day I think ZAPZ will be as big as harley davidson, if not bigger. Personally I would much rather commute to work on a zap electric bike than I would on a loud harley davidson. And, I’m sure my neighbors would appreciate the clean air and less noise as well.

  27. Look at ZAPZ go today! up to 3.08 so far. What’s your price target for this week?

     

    Editor: Tell me if the company is going to announce they have a deal with MB, and I’ll give you a price target. As it stands right now, I don’t have one. As I have been saying for several weeks, long term investors in this market only.

  28. Fair enough, but I don’t want to wait that long to speculate on this stock. I’m sure that the stock will be up to $10 miliseconds after such a deal is announced.

     

    Editor: Try 10 months after a deal is announced, if that. Nevertheless, it’s a heck of a shot.

  29. In your intial newsletter on ZAPZ, you stated that ZAPZ has the exclusive license to market this vehcile in the United States. Yet ZAP’s website states “ZAP is not affiliated with, or authorized by, smart gmbh, the manufacturer of SMART automobiles, or the smartUSA division of Mercedes-Benz LLC, the exclusive authorized U.S. importer and distributor of those vehicles. ZAP purchases its vehicles from non-affiliated direct importer Smart-Auto LLC.” These statements appear, on the surface, to be conflictive. Is this a gray market company/importer? If so, how does this effect our investment risk? If this car is so good, why is Mercedes not marketing it in the United States directly?

     

    Editor: Their right to market the car in the US is exclusive at the current time because they own the EPA and DOT approvals of the conversion process which took nearly two years to obtain. They are buying cars from a “Gray Market” distributor at the current time.

    Mercedes is not marketing the car in the US. They don’t have the approval to convert the car to US standards. I have heard they believed it couldn’t be done. I have also heard they didn’t recognize the market two years ago, and are now behind the curve.

    There are several risk factors which I believe I have spelled out quite clearly in past publications. MB could try to obtain the approvals, and market it themselves. That is probably the main risk factor.

    However, ZAP has the orders now, and MB could sell to them while the window of opportunity is open. On the other hand, ZAP might not be able to get the cars.

    I am an optimist and a believer in good old yankee ingenuity. If there is big demand, an American company will figure out how to fill that demand. This is why I believe this is a great speculation. Once we know how they will get the cars, the stock could be much higher. If they can’t get the cars, the stock could be much lower. That’s your risk.

     

  30. Wilkins notes that not since the splitting of the atom has something so small created such a stir – to the point where its manufacturer, DaimlerChrysler, is investing as much emotional and financial capital to build and promote the Smartcar. The vehicle’s ergonomic and fuel efficiencies have turned heads worldwide, particularly in Europe, where city roads are narrower than in North America. Its emissions, or lack thereof, have environmentally-minded consumers exhaling (and inhaling) sighs of relief. ZAP, the Santa Rosa, California-based company that has pioneered advanced transportation and energy technologies, and which owns the technology to “Americanize” the Smartcar to meet federal emissions and safety standards, has announced that advanced purchase orders for the German-built microcoupe have recently topped the Three-quarter-billion mark in the United States alone, or about $750 million worth. Wilkins also points out that in late April, ZAP demonstrated where that technology was leading, when CEO Steve Schneider took Santa Ana Mayor Miguel Palido on a test drive from City Hall about three miles (five kilometres), to the companys conversion facility on South Birch Street. The demonstration was aimed at pointing up how little the fuel gauge needle moved, and how clean the Santa Ana air stayed. It was just before the two got into the Smartcar that Schneider announced that his company had cleared the final regulatory hurdle to sell the Smartcar in 45 American states. It could prove to be a major turning point for the company, transforming its stock into investment vehicles just as exciting as the “green” motorized ones the firm produces currently.

  31. Just a word of caution on my part. Smart cars are being sold here in Canada since late 2004 through MB dealerships. MB has completed all the certification work with Transport Canada to make these cars roadworthy. Canadian emissions and safety standards are not much different from the US so in my mind MB could apply for certification pretty quickly (and probably receive it) if demand warrants it. My view is that ZAPZ must do a deal with MB for exclusive distribution rights or their first mover advantage with this car will be lost. I don’t see MB letting this much demand slide when they have the production capacity available to fill it and they have the dealerships to promote and distribute it.

     

    Editor:  I believe you have summed it up nicely. I have heard there is some major difference with the transmission software that MB would take some time to develop, but who knows for sure.

  32. The orders that you are quoting are CONDITIONAL ORDERS. The car is over priced and demand will NOT be there. It’s a pregnant roller skate. It’s NOT another Beetle. Their profit margin will be too small if the car is properly priced in the market. You’re following a looser. The time is not right for a car of this type and the big car makers will see to that. Find a better way to invest your money.

     

    Editor: I’m not sure they are conditional beyond being able to deliver the cars. However, you could be right that both the car and the stock will be losers. It’s what makes a market- some believe,  some don’t.

  33. Volume today was only 27,954. Avg Vol is 228,400 I can’t believe more people are interested in this stock!

     

    Editor: If you don’t like it, don’t buy it.

  34. Just a comment, I live up here in Canada, Niagara Falls, and these smart cars are becoming a little more common on the roads here in my area anyways. Perhaps this company may be on to something.

     

    Editor: I believe I have presented both sides of the story. If they can get the cars, the stock should do well. If they can’t, you could lose some portion of your investment. 

  35. I hope this is not a repeat of the Tucker story of the late 40′s. Remember that the GAS forTwo is rated by the EPA at -37 MPG- CITY AND HWY. There is a mis-inpression that has been encouraged by ZAP that the Gasoline powered forTwo can get 60 MPG . The Euro test figures of the Gasoline forTwo are 39.87 city/58.8 hwy/50.04 combined. Canadian diesel are 51.13 city/62.14 hwy and 56 mpg combined. Euro diesel are 60.31 city/75.88 hwy and 69.18 combined. For ZAP to make any mileage claims beyond official testing results would be misleading and probably in violation of their corporate code of ethics and FTC regulations. British journals report that used smart forTwo’s are selling for the price of a new motorcycle. Used Prius sell at a premium. Imagine the resale of a smart that a buyer paid between $23,800 and $25,800 for.

     

    Editor: Still- it’s all about what’s trendy and if they can get cars. Not about arguing over EPA stats. If the results on the car in Europe are that poor, you would think MB would be happy to sell them cars. I don’t know what is going to happen.

  36. Another one of your great idea’s going down the drain despite all the suppose good news, something fishie here, remember STLOF, Its now trading around .3¢ you told everyone when you were convering it , that every one with a long term outlook should have it in there portfolio, that one a great call.

     

    Editor:  I notice you didn’t mention NWWV nearly making a new all time high today. I notice you didn’t mention CADA- $4.50 to $20- Even go back to NTWK- $3.50 to $75 in March of 2000. You don’t have to be a genius to point out we have had some losers. In the microcap market you are going to have losers. That’s the way it is.

    No one likes a whiner. This is not for you. Go elsewhere for ideas. The OTC Journal is not worth your time. You are too brilliant for us.

  37. I wouldn’t call ZAPZ a loser yet. Some people got scared and dumped their shares on confusing news. It’s very likely that ZAPZ will still be able to fulfill these orders.

     

    Editor: I hope you are right, because if they can fill the orders, the stock has tremendous upside. When you have the willing buyers, someone always steps in to fill the demand.