Posts related to ‘auto’

Auto Suppliers: Fixing Car Companies While Breaking The System

fordThe novel approach that the federal government is taking to fixing the American car industry is that it will bail out the manufacturers while letting their suppliers fail. Car parts firms asked the Administration for $10 billions to keep many of them from folding or falling into bankruptcy. Many will not be able to find debtor-in-possession because the prospects of the domestic auto market are so bleak. Those firms will be liquidated. Read More »

Posted on: June 17, 2009 – 4:40 am in auto, , ,

Media Digest 5/18/2009 Reuters, WSJ, NYTime, FT, Bloomberg

newspaperReuters:   Small businesses are having trouble finding financing.

Reuters:   VW has stopped tie-up talks with Porsche.

Reuters:   The US budget chief says there are signs the economic free fall is over.

Reuters:   Central banks may need more power to maintain stability. Read More »

Posted on: May 18, 2009 – 2:54 am in Analyst Calls, Autos, Banking, China, Conglomerates, IPOs, Labor & Unions, Media, Oil & Gas, Press Digest, Research, auto, , , , , , , , , ,

ZAP Additional Funds Raised… From the U.A.E. (ZAAP)

There is some interesting financing news this morning, even if the financing is not one of massive proportions in private equity, venture capital, or in sovereign-type investments.

An OTC-BB listed stock called ZAP (OTCBB: ZAAP), a US-based electric car pure play, saw the completion of a financing pact this morning from Dubai-based The Al Yousuf Group.

The total financing was a convertible debt placement in the amount of $475,000.00, but this is after the Al Yousuf Group purchased $5 million in ZAP shares back in November.

The Al Yousuf Group is a manufacturing and distribution company in the U.A.E.  This isn’t the first "green investment" from the Arab world nor is this the first investment out of the U.A.E. for alternative energy plays.  But take this a step further.  Imagine if Zap! went out and allowed The Al Yousuf Group to either manufacture or at least coordinate some of the manufacturing of electric vehicles in the U.A.E. at some point down the road.

When Arab countries that produce oil invest in technologies that ultimately compete against oil, you know they are looking to get in on the next energy technology.

ZAP shares are up 3.6% at $0.86 in early trading today; its 52-week trading range is $0.40 to $1.16,

You can join our open email distribution list to hear about other IPO’s, secondaries, financings, spin-offs, and mergers.

Jon C. Ogg
May 19, 2008

Jon Ogg produces and edits the "10 Stocks Under $10" newsletter and he does not own securities in the companies he covers.

Posted on: May 19, 2008 – 9:13 am in Alternative Energy, Secondary Offering, auto,

High Oil: A Year Of Bankruptcies For Auto And Airline Firms?

American Air (NYSE: AMR) dropped 10% yesterday to and hit $10.20. The shares have not been at that  level since 2004. American lost money three of the last five years. It had a small net profit in 2007 of just over $500 million on $22.9 billion in revenue. The margin is razor thin.

In 2007, American also had interest expense of over $900 million. Long-term debt is about $9.4 billion.

In an industry which is as well-known for its bankruptcies as it is for its bad food, 2008 is shaping up as a truly awful year. Fuel prices are rocketing as oil passes above $107 a barrel. The recession is likely to put a drag on passengers, both business and pleasure. The $500 million that American made last year could turn to a loss of several billion in the blink of an eye.

The situation in the auto industry is as bad, for many of the same reasons, especially high oil prices which have gas at almost $3.50 and a market where customers will wait one more year to buy a car because they are as poor as church mice.

Shares in Ford (NYSE: F) fell to $5.58 yesterday. In early 2006 when several credit analysts said Ford might have to seek bankruptcy protection its share were higher than they are now.

Ford is going to be squeezed and squeezed hard this year. Commodities costs for car components are rising rapidly. Lehman Brothers has estimated that this could add over $350 to the cost of each vehicle. Ford and other car companies cannot get buyers into dealers, even with large incentives. The US car industry could loss over one million domestic unit sales compared to 2007. That is over $25 billion in revenue. Twenty percent of that could come from Ford based on its market share and the rate at which its sales are dropping.

The Ford family will obviously resist any effort to take the firm into bankruptcy, but if the price of building a car moves much higher in the second half and sales are off 15% in North American for 2008, the choices may come down to one.

Douglas A. McIntyre

Posted on: March 11, 2008 – 5:39 am in auto, ,