Thursday, April 7, 2011

American Superconductor: 10% Holder Kevin Douglas Buys Another 3 Million Shares on Bad News (AMSC)

The stock is cheap enough that if I were General Electric I would be thinking about how AMSC's business, to say nothing of their patent portfolio, might fit into my plans for world domination.
Speaking of the patents, I'll be back later today or tomorrow on how Sinoval may have set this whole debacle up with an eye on intellectual property.

I usually don't give two hoots about disclosing positions, the thinking being that anyone who makes an investment move based soley on something they read on a blog is prima facie a moron and will be shown to be such by the Lady Attorneys who will relieve said moron of any money that remains to further their regatta romps should an action commence, but in this case, because of the smacking the stock took, it might help to know that I have no dog in this fight.

From the Boston Business Journal:
American Superconductor Corp.'s (Nasdaq:AMSC) largest investor saw opportunity in the lower stock price of the company Wednesday, snapping up 3 million shares in the company at a cost of $42.8 million.
Shares in the Devens, Mass.-based power technologies firm fell 42 percent on Wednesday after the company reported that its largest customer refused to accept shipments of wind turbine components.

The company's top investor, wealthy telecommunications businessman Kevin G. Douglas, has been on a buying streak in the company over the past year. The purchase on Wednesday brought his stake in the company to 20.8 percent, or 10.57 million shares.

A regulatory filing shows that Douglas had also made stock purchases in the two days before the disclosure. Douglas bought 295,000 shares in the company at a cost of $7.3 million on Monday and Tuesday, according to the filing with the U.S. Securities and Exchange Commission.

Douglas is founder and chairman of the privately-held Douglas Telecommunications Inc. of California, and has never had an active role at American Superconductor, the company recently told the Wall Street Journal. Douglas declined to explain his interest in the company to the newspaper.

The new buys this week bring his total investment in the company over the past year to $172.8 million.
American Superconductor revealed after the market close Tuesday that Chinese wind power firm Sinovel Wind Group Co. had refused to accept contracted shipments of 1.5-megawatt and 3-megawatt wind turbine core electrical components and spare parts. American Superconductor believes Sinovel plans to reduce its inventory level before accepting further shipments.

The company said this will lead to lower-than-expected revenue for its fiscal fourth quarter, and a net loss. American Superconductor cut its revenue forecast for the full fiscal year 2010 to less than $355 million, compared with the company’s prior forecast of $430 million to $440 million.
A number of analysts responded by downgrading stock in the company, and shares closed at $14.47 on Wednesday, down from the closing price of $24.88 on Tuesday....
Here's the most recent filing, the guy's making a big bet.
We've looked at Mr. Douglas a few times, most recently in: