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Versant’s Massimo Fiore says Zenn Motor is a Speculative Buy

Zenn Motor founder Ian Clifford. Versant analyst Massimo Fiore says today's announced private placement is a

Zenn Motor founder Ian Clifford. Versant analyst Massimo Fiore says today's announced private placement is a "positive catalyst" that "significantly alleviates stress on its operating cash reserves."
Zenn Motor (TSXV:ZNN) today announced it will raise $2-million in a non-brokered private placement, the company says the financing has already been fully allocated. The cash will give Zenn a little more breathing room on top of the $1.2-million in had in the bank at the end of 2011.

In a research update to clients today, Versant analyst Massimo Fiore said the move is a “positive catalyst” that “significantly alleviates stress on its operating cash reserves.” Though he declined to set a twelve-month target price, Fiore said he is rating Zenn Motor a Speculative Buy.

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Fiscal 2011 was a particularly difficult year for Zenn. The company had to reduce its head count and suspend its investment in EEStor, a Texas company that claims to have developed a new form of capacitor for electricity storage that can reduce the weight of a conventional lead-acid battery by 90%. Though the company’s shareholders agreed to renew their “poison pill” rights plan last week, the private placement may help dampen takeover talk that has been part of the mix since shares of Zenn began sliding midway through 2009.

Fiore says another positive catalyst will happen within the next three months, as the controversial EEStor has committed to publicly disclose its technological advancements, which some have cast aspersions on. CNet’s Michael Kanellos, for instance, described the company as “a cross between Tesla Motors and the CIA.”

Despite the troubles of some electric car manufacturers, recent data suggests the future is bright for electric cars. A report by IHS Global Insight says electric vehicles, whether hybrid or purely electric, could make up 20% of the global market by 2030. The report says adoption will be slowed or accelerated depending upon the rate of technological advancement.

Shares of Zenn Motor closed today up 13.4% to $1.10.

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About The Author /

Nick Waddell
Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.

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