Some days ago, we put out an article about a new contract signed by Coates International Ltd (OTCMKTS: COTE). The company seems to be on fire, because on May 4, 2017, it put out more news; two officials from the Pentagon ACSIM-ODF US Army had a meeting in the company’s headquarters to discuss Coates’ technology at US Army bases. In this article, we will explain the move. This news also provides some more insight about the first industrial V12 QST 30-G4 engine for the hydrogen technology, which is being developed by Coates. Check out the last spike in the chart price:
We encourage investors to read out first article to get to know the business of COTE. In this article, we will only provide information about the recent developments of the company.
On May 2, 2017, the company celebrated a meeting with two officials from the Pentagon ACSIM-ODF US Army to negotiate the use of Coates CSRV industrial electric power generators in the US Army bases. We selected the following words from what COTE’s President and CEO said about the meeting:
“A number of Coates CSRV industrial natural gas electric power generator types were demonstrated, including a propane unit and various gasoline engines. At the conclusion of the meeting, the parties agreed that it was productive and positive. All products for this application will be manufactured in the USA.” Source
In our opinion, the meeting is very positive. It shows that the company owns a legitimate business, and even the US government is interested. Furthermore, we believe that the fact that company’s application will be manufactured in the US should be attractive for the new Trump administration. To sum up, the company not only owns revolutionary technology, but its savvy management knows where to locate the factories.
Additionally, on April 26, 2017, the company put out a press release, wherein it stated that the projects previously announced were evolving. In particular, the first industrial V12 QST 30-G4 engine for the hydrogen technology was delivered to the Coates plant in New Jersey. The words of the President and CEO, Mr. George J. Coates, were extensive in the press release. In our opinion, the most important points addressed about the company’s technology were the following:
“Scientists around the world have been dreaming about tapping into the sun’s energy to produce electric power on earth. That is exactly what we are working on now. Harvesting hydrogen from the sun that can be used to fuel Coates CSRV industrial electric power generators. We believe this will achieve the highest form of environmental “green energy” technology of its kind. We have developed proprietary technology over the past year to integrate the proper safeguards with our CSRV technology, enabling the gaseous hydrogen to be used safely as the main fuel source.” Source
He also noted the large amount of shares being exchanged at the moment on the open market and said that he could not find any specific reason for it:
“Other than shares issued upon conversion of promissory notes issued six months ago or more, it is not possible to determine any specific reasons for our daily trading volume, because it is not within our control.” Source
In our opinion, the only way to justify the large amount of shares exchanged in the market at the moment is that investors seem excited about the new technology being developed by the company. This is the only way to explain it, because we did not see any new major investment fund buying or selling the company.
Additionally, in the same press release, the CEO provided some insight about its plans in China:
“The Company has already received a $500,000 deposit and delivered one 150 KW N14 electric generator to Coates Power in China and received a $131,000.00 payment. During the visit by a Chinese delegation last year, top executives expressed that they would put a proposal together for the Coates Company.” Source
Market Reaction – Volume
Traders subscribed to email alerts probably profited from the news released on May 4, 2017. We studied the market move and saw a large amount of traders hitting the ask to buy shares right after they noticed the meeting with the US Army Officials. In total, approximately 718 million shares were exchanged that day, which is quite substantial. The average volume exchanged in the last three months was approximately 59 million. Hence, it indicates that investors bought and sold 12 times more shares that day than the average. To sum up, traders are very much interested in the technology.
The more volume in a stock, the more liquidity, which brings larger amount of investors and at the end of the day made the share price move up. Subscribers know these rules because we repeat them every time. To tell a long story short, successful investors are those who look for interesting news that create large volumes and expectations. At the moment, Coates seems to be creating this situation.
The company continues to put out interesting news. This time it was the the US Army, which became interested in the company’s power generation technologies. Traders celebrated this news by buying a large amount of shares in the open market. Hence, we believe that the only way to explain the recent uptrend in the share price is just the technology being developed. Additionally, in this piece, we provided some insight about COTE’s projects in New Jersey and China.
The company did not put out new financial statements. Hence, we still believe that playing COTE is a high risk and high reward investment play, because the amount of liabilities shown in the balance sheet remain substantial. However, as we said, the company seem to be developing interesting technology that will help the company negotiate with suppliers and debt holders. If the negotiations are successful, traders could see further gains. We will be updating our subscribers as soon as we know more. For the latest updates on COTE, sign up below!
Disclosure: We have no position in COTE and have not been compensated for this article.