Citron Research Updates Ener1 (AMEX:HEV)

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Ener1 management has to learn the difference between vague promises and bankable commitments.  As the company is currently on the road attempting to raise money, Citron encourages management to deliver a more accurate representation of their current “contract” with Th!nk Global to potential investors.

In a previous report, we explained how Delphi sold their 19.5% stake in EnerDel for $27 million in cash and stock, pegging EnerDel’s value at around $1 a share.  And note that, in selling it to Ener1, we note an absence of any other strategic buyers at a higher price.  Yet, even $1 a share is inflated compared to the mountains of cheap stock that management has been able to acquire in the company over the years, the cost basis of which Citron believes to be at well under .50 a share.

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Citron Reports on Ener1 (AMEX:HEV)

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You don’t need a PhD in chemistry – just a high school diploma in common sense.

So here is the story in a nutshell (or the trunk of a Prius). It is Citron’s opinion that Ener1 is just a corporate shell company with a long history of failed businesses based on exaggerated promises. Management has tried everything from video games to visualization software to set top boxes for television. All of these businesses have failed — miniscule revenues and never a penny of profit delivered to investors. They purchased Delphi’s years-old attempt to get a lithium battery business going, and got a sublease on a manufacturing plant in Indianapolis. Since then we haven’t seen a single sign of a viable business.

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