Lithium ion battery market player Ener1 ( HEV) made a big splash this week when it inked a joint venture with the electric vehicle division of Wanxiang, the largest "tier one" auto parts producer in China. It was a big headline that was followed up by an appearance on CNBC, and it also coincided with a big stock sale by one big Ener1 insider.
Ener1 shares opened up nearly 40% on Tuesday, before settling for a 25% spike after the euphoria settled, sort of. Ener1 trades roughly 25 million to 30 million shares a month. On Tuesday, more than 20 million shares changed hands, and for the week, it's come close to its average monthly tally. For a brief second in time during Tuesday's morning rally, Ener1 shares reached $5.90. On Friday at the close, Ener1 shares were back to $4.22. The Ener1 rally was problematic from the get-go, at least as far as bidding the stock valuation up based on the joint venture, since the lithium ion battery company actually announced the deal in May and had a rally at that time based on news.
It wasn't likely that the Ener1 shares would remain at $5.90 for long, and in addition to some high-frequency trading machines, an Ener1 director made a sale on Tuesday that shows he was willing to part with two-thirds of his insider holding in the lithium ion battery company at the $5 mark. The shares peaked on Tuesday morning right around 9:58 a.m., shortly after a CNBC host berated Ener1 CEO Charles Gassenheimer for allegedly giving away the technology "secret sauce" to the Chinese, and Ener1 shares fell by 10:18 a.m. to below the $5 mark. Kenneth Baker, a director of Ener1 described by the company's web site as a long time automotive executive with a focus on alternative energy, sold 20,000 shares of Ener1, or roughly 66% of his holdings, at the price of $5. The shares held by the director were valued at $2.10. Insider selling has heavily outpaced insider buying this year, with a net $770,00 in insider sales over the past 12 months.
Shares of Ener1 (Nasdaq:HEV) were gapping down Wednesday morning with an open price 19.2% lower than Tuesday's closing price. The stock closed at 26 cents yesterday and opened today's trading at 21 cents.