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No. of Recommendations: 2
I look at my holding almost as a lottery ticket - not the best use of my money, but there's a long shot for great upside.

Any insight on today's announcements would be much appreciated.


With Philips buying IMGC the question is did Philips want the superconductor wire business? If not, AMSC is a good lottery ticket (in my estimation). If so, AMSC now has a deep pocket company to fight in the marketplace. That's not good! (Every indication is the Philips purchased IMGC because the stock was cheap and they were a major customer of Philips'.)

The problem with AMSC: Who will be competing in wire in the long-term? There are lots of universities trying to develop the technology and there are big names trying to do the same. The key question is when AMSC can get products generating money so they can invest strongly in their technology -- and stop today's cash burn.

This is a chicken-and-the-egg situation. 2G wire is here, it should be in high demand, and AMSC could have a strong future if competitors say away (like what has happened to RB pick ISRG). But, the stock is weak (in my opinion) because it looks like the company will need to sell more shares (or borrow money) and it is unclear when big potential projects (like electricity-saving motors) will finally lead to commercial sales.

This is a fun company to watch. So far, I have not found a reason to own the shares.

Just one person's opinion...

W.D.
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