Monday, October 31, 2011

NASDAQ Boots Ener1 (HEVV.PK) And Taxpayer Loses Again

Energy companies that got federal loan guarantees are dropping like flies.  Why, just yesterday I blogged about the collapse of Beacon Power and the stimulus money it wasted.  BTW, I may have underestimated the total amount BCON actually borrowed under the loan guarantee.  Today we see another federally-backed company, Ener1 (HEVV.PK), getting delisted from NASDAQ because its financial statements aren't trustworthy.  Here are some highlights of this marvelous winner's recent operations. 

The Ener1 subsidiary that got the DOE grant, EnerDel, spent $53mm in taxpayer money to employ 253 people, costing $209,486 per stimulus job.  The company now employs 33 people, for a total program cost of $1,606,060 per job.  The stimulus jobs just keep getting more expensive.  That's what's funny about government procurement; a fixed-dollar contract drives up per-unit costs as the contractor discovers just how difficult it is to provide back-end support.  Just ask Lockheed Martin about their success with the F-35 . . . but I digress.

The news for taxpayers keeps getting worse with DOE's loan guarantees and grant programs.  At least Uncle Sam isn't the only institutional investor who's in the hole; Aspire Capital Fund threw $2mm down the tubes in August.  I hope this latest flop has the decency to change its name from Ener1 to something more appropriate, like Ener0 or EnerNothing. 

Full disclosure:  No position in HEVV, ever.