On July 26th I wrote a piece about oil and energy which also focused on the speculative battery technology company EEstor and it's minority owner Zenn Motor Company (ZNNMF). Since then I've given more thought and some added research to the matter. On July 29th, I posted a correction to my original pieces as follows:
re: the Zenn investment, it seems the information in my piece was incorrect. According to a 7/2/09 press release you can find at
the Zenn investment was $5M [not $700,00]. The other noteworthy fact from this press release is that Zenn was able to invest the maximum amount permitted under a prior agreement because other investors (presumably Kleiner Perkins) elected not to invest the amount to which they were entitled.
It is potentially quite troubling that Kleiner Perkins is no longer supporting EEstor. It is also a bit troubling that Mort Topfer, a former Dell top exec, has left the EEstor board for the second time as of June, 2009.
In sum, I must say that the skeptics on EEstor also have a lot of ammunition.
It's possible that Weir is hookwinking Zenn into bankrolling them now. But the question is why would Weir want to do that if he did not feel he was going to be successful fairly soon. Expectations have been raised for rapid product visibility. Weir must think he can produce.
As I think about the matter further, it seems increasingly likely to me that the EEstor/Kleiner-Perkins relationship probably came apart some time ago and that K-P no longer supports EEstor. There could be personality reasons behind such a split but I doubt it could be unrelated to a cold business judgment on the part of K-P. That is not a good signal for EEstor bulls.
In retrospect, my judgment now is that the degree of risk in Zenn's stock is just as high as it has ever been. Therefore I have reduced my Zenn holdings. I still have some shares, but I think they are a pure roll of the dice with probably no more than a 10% chance of success. Fortunately, the price of Zenn has been fairly strong since July 26th, so any follower of this site who wants to become more conservative in regard to Zenn, as I have, is likely to be able to sell at a profit.
In sum, there are many more interesting and important investment decisions that require attention than this one speculation, despite the huge potential that a success would have. I would not allocate a lot more brain cells to Zenn. Either it happens and I will wish I had owned a lot more shares or, more likely, Zenn will fade into the the sunset at some point, another Grand Plan that was not practical.