The next Solyndra?
posted at 2:45 pm on October 31, 2011 by Ed Morrissey
Earlier today, we highlighted two bankruptcies involving taxpayer-backed loan guarantees for federal social engineering, and involving some bad judgment — or worse. One might wonder how many more of these taxpayer-backed loan recipients might go under in the coming weeks and months. CBS might have given us a sneak peek of the next Solyndra — or at least the next Beacon Power:
A company whose subsidiary received $118 million in stimulus grant money from the U.S. Department of Energy to build new electric car batteries has now been removed from trading on NASDAQ.
EnerDel got an Energy Department grant in early 2010 for battery manufacturing in Indiana but the stock of EnerDel’s parent company, Ener1, fell from $4.04 in 2010 to just 9 cents on Thursday. By Friday NASDAQ had pulled the company from its listing leaving the stock at $0.00.
NASDAQ took action after sending the company a notice saying it was out of compliance for failing to file its June 30th financial quarterly filing. The company notified shareholders back in August that two of the company’s quarterly filings “should no longer be relied upon” and the company would have to re-do their financial statements.
NADSAQ also delisted Beacon Power, after warning the company about its intent just weeks before the Obama administration approved Beacon Power’s loan. What was Ener1’s track record on the stock market? After hitting a peak of $9.40 per share in December 2008 — not exactly a brilliant time for the stock market — the stock dropped to less than half of that price in January 2010 ($4.07) and dropped below $3 a share by summer 2010. For some reason, the Obama administration saw this as a good bet with taxpayer dollars, even though investors were clearly fleeing Ener1. Today’s trading price? Eleven cents a share at the open.
So far, EnerDel has spent $53 million of their taxpayer-backed credit. How many jobs did that create? According to EnerDel, that funding now supports … 33 jobs. That works out to $1.6 million per job — and that’s only if Ener1 can restate its financials and keep its doors open.
Here’s a question: why didn’t the Obama administration catch the fact that the company’s financial statements were unreliable? Shouldn’t the experts at the Department of Energy or at the Treasury’s “bank” that issued these loans have been paying attention to those financial statements? Oh, right — the Obama administration wanted less scrutiny for their green-tech loan program. In that, at least, they succeeded.