ZAPZ has reversed course is now rolling back uphill. Today, before the market opened, ZAPZ announced orders 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 cars before it 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 big issue 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 to bet 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.