Advanced Battery Technologies, Inc. (OTCMKTS:ABAT) Jumps Three Times In a Row
Advanced Battery Technologies, Inc. (OTCMKTS:ABAT) has been climbing the charts since Monday. The company’s market value swelled by more than 90% in just three sessions – all on the news of the construction of the new Tesla Motors, Inc. (NASDAQ:TSLA) battery manufacturing facility in North America. ABAT stock is presently traded for $0.86, but is the investor’s enthusiasm and trust in the company really warranted?
To start off, ABAT is a Chinese company. This fact alone is enough to more or less destroy the credibility of its financial filings, because even if the company files a financial report with the SEC, the commission has no way of verifying the disclosed information. In many cases due diligence becomes meaningless, and the results of research are often misleading.
Anyone that tries to do proper research on ABAT will also run into another problem – the company’s financial filings aren’t simply unreliable – they’re nonexistent. Since the company got slapped with the Braun lawsuit in May 2011, ABAT has filed a single financial report with the SEC – the 10-Q that covered the period ended Jun. 30, 2011. The reason for the enduring silence is unclear, but the fact remains – ABAT‘s inertia has cost the company most of its market value.
The closest thing to a financial filing ABAT has is the “Limited Financial Report for 2012” that can be found on its Chinese website. The numbers in it were intriguing, but, once again, unverifiable in any way whatsoever. However, even if it was accurate, presently it is woefully outdated, and thus holds little value for investors.
The numerous red flags listed so far should be reason reason enough for any investor to think twice before committing to ABAT stock. Such an investment is essentially a gamble, one that’s outcome is nigh impossible to predict. But there is another issue with the situation, an issue that involves simple logic.
The company’s stock, as many others in the lithium branch, rose on the news of the opening of a battery manufacturing facility in North America. Companies that focus on the production of lithium, such as Lithium Exploration Group, Inc. (OTCMKTS:LEXG) and Amerilithium, Cor. (OTCMKTS:AMEL) may well profit from the facility, as they may potentially be commissioned to supply said facility. TSLA itself is likely to reap tremendous commercial benefits from it, as the facility will give its owner yet another edge on the US market. ABAT, on the other hand, stands to gain nothing. If anything, it may lose some of its market share to the new competitor.