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.

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But recall, Alter said that the Obama admin. is corruption free.

Schadenfreude on October 31, 2011 at 2:46 PM

But recall, Alter said that the Obama admin. is corruption free.

Schadenfreude on October 31, 2011 at 2:46 PM

..yea but he was just waxing exuberant because someone gave him a new pair of sequined knee-pads and he was trying them out.

The War Planner on October 31, 2011 at 2:49 PM

What Green companies if any have turned an actual profit that this administration helped?

hawkdriver on October 31, 2011 at 2:49 PM

Just remember it’s not a scandal, Ed. Jonathan Alter has determined that O’s only scandal was the Tim Geithner tax business. Presumably, even the administration’s openly announced decision to lie to FOIA applicants isn’t a scandal for the Most Integrity-Soaked President EVAH.

J.E. Dyer on October 31, 2011 at 2:50 PM

“According to EnerDel, that funding now supports … 33 jobs. That works out to $1.6 million per job —…”

It’s good work…

… if you can get it.

/

Seven Percent Solution on October 31, 2011 at 2:50 PM

Alter also said that BHO was honest…these are simply honest mistakes…you racists.

d1carter on October 31, 2011 at 2:52 PM

Fun story: my mother thought I was auditing Solyndra. What a nightmare that would be.

John_Locke on October 31, 2011 at 2:53 PM

This run-o-bad luck continues….dadgum. Reminds me of that Clint Black tune. You would think that with all of the foreknowledge that these foreskins had about these “bad bets” that led to “bad breaks” saith Daley, that they might’ve used our money a little bit more wisely.

Oh well, ya’ll are going to pay for it hard. And by “yall” I mean Democrats first

ted c on October 31, 2011 at 2:54 PM

Jonathan Alter as he mounts Chrissy Matthews…

(mmmph… mmmph… mmmph…)

Seven Percent Solution on October 31, 2011 at 2:55 PM

Bad investments like these are made on purpose, and hasten the downfall of America, by design.
Expect more.

maryo on October 31, 2011 at 3:00 PM

Stephen Chu is either corrupt or the stupidest Nobel winner ever.

This is what? 5 bankrupt DOE backed payoffs to cronies errrr “projects”…

tetriskid on October 31, 2011 at 3:00 PM

move along now, nothing to see here…

cmsinaz on October 31, 2011 at 3:03 PM

While Obambi’s adminstration is throwing tax payers’ money down the toilet with all these crony investments, other democrats are doing similar wealth destruction in the private sector. See what good old Jon Corzine just did:

MF Global files for bankruptcy after deal unravels

http://tinyurl.com/6klqyg5

poxoma on October 31, 2011 at 3:10 PM

Why didn’t the Obama administration catch the fact that the company’s financial statements were unreliable?

I believe this wasn’t corruption — exactly — but rather picking winners. The intent of Obama-Pelosi-Reid was to pass Cap&Tax, making their companies winners because all others would be losers. Once Cap&Tax fell through, it should have been obvious even to Obama that these Green bets were going to fail. But either he didn’t pay attention or didn’t care.

jwolf on October 31, 2011 at 3:11 PM

Looking at those numbers in 2010 makes you wonder if they even read the financials. Routine losses per share, erratic cash flow, sounds like a great investment.

John_Locke on October 31, 2011 at 3:11 PM

That works out to $1.6 million per job

Bad enough, but what is worse, is…those 33 didn’t get the 1.6 mil, it was the “1%” who actually got it.
Obama is supporting the 1%…

right2bright on October 31, 2011 at 3:14 PM

Somebody figured out a way to do the perfect crime.Get a clown elected,use global warming as an excuse,form green companies,design them to fail,get huge taxpayer funded money,kick back to the clown and his crew,declare bankruptcy,and ride off into the sunset worry free.

docflash on October 31, 2011 at 3:16 PM

“We knew going in that some of these investments wouldn’t work out”

Uh…if you knew it was going to fail beforehand, why did…screw it.

I know the answer and it ain’t got nothing to do with “Green”. Check that…it has everything to do with “Green”…but not the energy kind.

BobMbx on October 31, 2011 at 3:18 PM

We have 12 more months to find more ‘Solyndras’ like this, which probably won’t be difficult.

stevezilla on October 31, 2011 at 3:18 PM

I wonder if these companies would be making profit had the Cap and Trade boondoggle passed and became law. Lucky for us the GOP took the House last year.

Broomy on October 31, 2011 at 3:24 PM

why don’t we just look at these for what they really are? A straight forward money laundering game to put money into Dem’s elections.

jpcpt03 on October 31, 2011 at 3:26 PM

Remember when Chu said BP would save the planet.

seven on October 31, 2011 at 3:27 PM

Remember when Chu said BP would save the planet.

seven on October 31, 2011 at 3:27 PM

I’m just surprised they haven’t accidentally released Cthulhu yet.

teke184 on October 31, 2011 at 3:30 PM

None of this will stick since solyndra has been greeted with a big yawn. Sadly people should be in jail over this corruption. If there was an R in the white house we all know this would be leading the nightly news.

Now regarding having to restate financials, it is very hard for a small company to have the expertise to know all of the nuances in financial compliance and if the auditors also miss something, filings can be done and thought to be correct. That happened to my company. We had investor notes for financing that would age for the correct time and then the investor would be paid back in free trading stock. Because the notes did not state a floor price for the stock valuations once the time had passed, it turns out we were supposed to hire a third party to place a valuation on those notes. We only found that out when we changed auditors because we were so dissatisfied with how our first audit company prioritized us in their scheduling. We had to file one of those SEC notices for five quarters. It cost us over $100k to try to get the financials restated and we ran out of money before we could finish. The derivative valuations hardly impacted the numbers in the financials. It was a huge distraction and we ended up running out of time to make an acquisition that would have turned us into a $25 million dollar a year company within 3 years and created dozens of jobs in several states. We were lining up $ 6 million in investor financing and this auditor oversight cost us this deal.

When I see all of this taxpayer money wasted when we tried to do everything right with private money, it makes my blood boil. Even my background and experience could have recognized the solyndra train wreck a mile away. Then we find out the loan deal violated law by putting the taxpayers behind the Obama connected hedge fund people – people need to go to jail.

karenhasfreedom on October 31, 2011 at 3:32 PM

When I see all of this taxpayer money wasted when we tried to do everything right with private money, it makes my blood boil. Even my background and experience could have recognized the solyndra train wreck a mile away. Then we find out the loan deal violated law by putting the taxpayers behind the Obama connected hedge fund people – people need to go to jail.

karenhasfreedom on October 31, 2011 at 3:32 PM

Obviously, your company was not an 8a firm.

You know what they call people who play by the rules? “Suckers”

BobMbx on October 31, 2011 at 3:42 PM

DOE wants to participate in Fast & Furious with the way the companies they ‘invest’ in are going bankrupt.

Oleta on October 31, 2011 at 3:56 PM

Nice opportunity here for some investigative journalism! Somebody needs to study all the companies that have received DOE green scam cash. Especially the $ that was pushed out in September to beat the “stimulus” deadline.

#WeCantWait for Jan, 20th 2013

shanimal on October 31, 2011 at 4:01 PM

Which Obama bundler was connected to this company? I am sure somewhere in the mix we will find a FOO (friend of Obama) who recommended this company to protect his investment.

bopbottle on October 31, 2011 at 4:04 PM

The only “green” these companies have seen is taxpayer dollars.

GarandFan on October 31, 2011 at 4:18 PM

Here’s a question: why didn’t the Obama administration catch the fact that the company’s financial statements were unreliable?

They looked okay when Geithner put the numbers into TurboTax.

malclave on October 31, 2011 at 4:29 PM

I wonder just how much of these trillions, billions, and millions of taxpayer dollars being laundered are going to end up in Democrat’s and Barack Hussein Obama’s campaign coffers.

Quite a large sum I would guess.

FlatFoot on October 31, 2011 at 5:23 PM

You scoffers are just not sophisticated investors like Obama and his cohorts. You win some and you lose some. At least he’s trying and really hard. He cares too about the planet so just stuff it and stop being so negative.

stefano1 on October 31, 2011 at 5:47 PM

EnerDel? Ok, not the one I read about earlier today.

I was thinking this would be the 43 million for Beacon Power Corp. in Delaware…

http://thehill.com/blogs/e2-wire/e2-wire/190641-second-energy-dept-backed-company-goes-bankrupt

Oh well, 43 million here, 118 million there; 535 million for Solyndra… nothing big. Sure we may have lost a billion dollars, but environmentally-approved SMUG isn’t cheap.

gekkobear on October 31, 2011 at 5:48 PM

Oh, that one was reported here, a few more posts down, along with:

Open Range promised that it could deliver high-speed Internet access via satellite to isolated, rural areas, but despite having a $267 million line of taxpayer credit, never delivered

So 42 + 118 + 267 + 535? Yeah, it’s just one bad apple, or 4 bad apples, or an entire basket of bad apples…

But lets not dwell on the bad, lets look at the barrel of good apples.. or maybe the basket of good apples? Can we manage a punnet?

gekkobear on October 31, 2011 at 5:52 PM

Wasn’t there one called Light Squared ? Wasn’t there another one in Colorado ?

You scoffers are just not sophisticated investors like Obama and his cohorts. You win some and you lose some. At least he’s trying and really hard. He cares too about the planet so just stuff it and stop being so negative.

stefano1 on October 31, 2011 at 5:47 PM

ROFL! Zero is trying really hard to give as much money as possible to his cronies!

dogsoldier on October 31, 2011 at 6:57 PM

There is plenty, plenty of venture capital out there for real companies. VC firms are sweating about the lack of opportunities for placements — treasuries pay squat.

The only reason for a government loan or guarantee is that VC won’t buy in. The same smart people that brought you Apple, Google, Tandem, Facebook, Palm, and all those other names you recognize don’t see the worth in a venture, so it calls the Department of Energy (or some other branch of the Feds). Face it, Federal investment is the Kiss of Death — private investors funded WebVan and [insert your favorite internet failure]….the current company makes even less sense.

cthulhu on November 1, 2011 at 2:27 AM