Another DOE-Backed Alternative Energy Bankruptcy (BCON)

Alternative energy stocks continue on their path of self-destruction.  The government has been handing over taxpayer cash in droves to help fund alternative energy companies.  Now what we are witnessing is nothing short of a blissful dream of oil executives.  Beacon Power Corporation (NASDAQ: BCON) is the latest implosion and it has filed for bankruptcy protection.

It was just on April 28 of this year that we noted, “Beacon Power makes a flywheel device designed to help regulate frequency services on the US power grid. The company is nearing completion of its first 20-megawatt flywheel storage plant in New York state, and has just received approval from the US Department of Energy to draw up to 95% of a $24 million federal grant to begin work on its second plant in Pennsylvania.”

Now Beacon is bankrupt.  The company still has more assets than liabilities (listed as $72 million versus $47 million), but it is burning cash at a rate that cannot be met by revenues and its operating losses are eating it alive.  The company had received some $43 million loan guarantees under the Department of Energy.

Beacon is now looking like it may be in the same boat as Evergreen Solar and Solyndra.  Great use of our taxpayer assets.  At least the banks have mostly paid us back.

To show just how bad things are, Beacon had already been given a NASDAQ delisting notice as it was seeking financing.  Now shares are down 73% at $0.12 and the new 52-week range is $0.11 to $3.50.  The news flow is not yet focusing on another government-backed bankruptcy in alternative energy.

Do you know how to make a small fortune?  Start with a large fortune and bet heavily on a risky money-losing company in alternative energy.

JON C. OGG