Energy Conversion Devices, Inc. (NASDAQ: ENER) has proven that penny stocks in trouble just cannot be trusted. The small solar player used to be close to $100 and then dropped, and drop, and kept dropping. Now the company has filed for Chapter 11 bankruptcy protection.
This was one of the ten companies we outlined as unlikely to survive 2012.
The company is now seeking to sell itself. It could have done that long ago when there was still some value in the stock, but that is what happens when amateurs refuse to accept the writing on the wall as having merit. Its ovonic battery company was sold to BASF, and operations will supposedly continue during the sale process.
The Company says that it has received support for its operating and divestiture plan under formal support executed with holders of approximately 70% of its $263.2 million in outstanding 3% Convertible Senior Notes due 2013.
Energy Conversion Devices has retained the investment banking firm Quarton Partners, LLC.
Perhaps the new name should be called Energy Suppression Devices.
Shares are down about 75% at $0.30. With a low of $0.20 in the last few months, some investors think this bankruptcy will not leave them with a goose egg.
The Guggenheim Solar ETF (NYSE: TAN) is down 5% at $3.24.
JON C. OGG
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