Hey Dude, Where's My Documentary? or What Happened to Pump and Dump, the Fuel Cell Documentary (Dude)?

In 2015, I began investigating hydrogen fuel cell companies for a documentary to educate the public about how an alternative energy source had been seemingly killed by Wall Street insider trading and Big Oil. I was most surprised at what little cooperation I received from any hydrogen fuel cell company. As I began to dig, I began to find out why. What I found out in my investigations will shock you. Here is part one of Hey Dude, Where's My Documentary? 

It was late 2013 November to be exact my wife and I had just returned from a contract teaching in Saudi Arabia for the American company of Raytheon and its subsidiary company called SALTS. We had returned to the United States full of many things. We had hope for the future. We were also full of relief at being able to return to the United States and leave the Arab world behind after many years of teaching and finally a fairly sized chunk of money. We would finally be able to settle down and live the American dream.

There were many reasons for our hope and optimism. The first being that we had been watching a technology that seemed to be on the verge of a major breakout. That technology was called hydrogen fuel cell technology. But before we go into too many specifics, let's begin with a little bit of background and history of what hydrogen fuel cells are and what they have been in the past.

In 1999 while reading Scientific American, I had seen an article about a new technology called hydrogen fuel cells. The article stated along with an explanation of how hydrogen fuel cells work (that I will not go into at this point) as well as how hydrogen fuel cells will ultimately replace batteries, internal combustion engines and just about every other energy source. According the article, we had with a cheap clean technology whose only byproduct was water. I mean water. How much cleaner can you get?

But I was not the only one riding the hydrogen fuel cell title wave of optimism in 1999. On the stock market the stock prices for companies like Ballard Power Systems of Canada, Plug Power Systems of New York and Fuel Cell Energy of Connecticut also saw their stock prices go everywhere from over one hundred dollars for Ballard Power down to between $75 and $80 for the other mentioned companies. But alas, the tech bubble burst in 1999 and took with it price of fuel cell stocks and the optimism. It also took millions if not billions of dollars in investor money and placed in the hands of those who had the “vision” to get out early.

I myself have never seen a lot of activity in the stock market simply because of the fact that I have never had that much money to invest. But, with the salaries I was making in the Middle East as a teacher of English in universities and on military contracts, along with the sales of my first two books, I finally had a little bit of extra money. So, I thought I would begin to invest. I, being an idealist through and through, limited myself to investments in green energy starting in the year 2008.

Although it may seem to be digressing a little bit, I feel it is important for the reader to understand that the idea here is to not only understand what has happened to fuel cell technology, but also what is happened to alternative energy stocks period. So, we must start in 2008.

In 2007-2008, the stock price of a company called First Solar began a meteoric rise. This rise was based on the fact that First Solar’s solar panels incorporated a new cheaper metal (cadmium telluride if anyone cares) which allowed them to be produced and sold at a much lower cost. At the time of the news and the expansion of First Solar from the United States into Germany and Europe, the stock price soared from around $45 and ultimately hit $280 before it, in the vernacular of the market "tanked." For the first time ever, I chose to invest some money and I actually made a little bit on the transaction.  I had enogh sense to get out of the stock before it ultimately plummeted.

Full of enthusiasm for the stock market and the "American Way" I began looking around for more green technology to invest in. Enter a company called BioSolar.

When I first saw BioSolar, my attention was peaked because, like First Solar, they claimed to have a revolutionary new solar panel or what they called a back sheet which was made from naturally occurring materials such as linseed oil and cotton. Not being a petroleum product made it both environmentally friendlier and much cheaper to produce.

I watched as the stock went from mere pennies to over a dollar. I saw that it was time to get in as I calculated my profits from investing a few thousand dollars at a little over a dollar a share in a stock that could reach the same levels as First Solar had just a few months before.

Like all other unwary uneducated and most likely foolish investors, I saw the pie-in-the-sky and I wanted as big of a slice for myself as I could possibly afford. It was at the time that the market had just crashed and I had made some money investing in things like Ford at $4 and General Electric at $8. At that time, GM was a dollar a share, but a taxpayer bailed out company to me did not seem like the kind of investment with the return that Biosolar, a small company out of Salinas California was sure to produce. And so it seemed, it was just a matter of time before my ship was going to come in. It also seemed foolish at the time not to have as much money as I could possibly scrape together to invest in this company.

There were warning signs, however. In an article posted on the Internet shortly after I began to make my investments, I noticed an article written by somebody who had nothing good to say about Biosolar. The article stated that the reason its stock price has soared to over a dollar was the result of something called a “Pump and Dump.” In the article the author pointed out that a Bloomberg "journalist" had been paid an undisclosed amount of shares by Biosolar management in return for a favorable treatment of Biosolar in an article. I remembered that article was what had influenced me to even consider the penny stock company was that it had been mentioned in Bloomberg, a reputable publication. So how could anything go wrong?

Immediately after the article was published, the price of the shares stopped rising. In fact, they seemed to be dropping somewhat. Being a new investor, I was not familiar with the term the author criticizing the company and the writer's publication used, or "pump and dump.” It seemed a rather self-explanatory phrase but I was not overly concerned. After all, I hadn’t lost any money trading, yet.

But the fact was, the Bloomberg author had pumped the BioSolar stock using his publication’s reputation for integrity and then had dumped the stock. Most likely he dumped it immediately after he was given the shares and that massive dump, along with the panic caused by the article subsequently published cause the shares to drop. First, they went into the $.80 a share range and ultimately ended up around $.10 a share.

But for me, the uninitiated unwary investor, I could see nothing but light and hope at the end of the tunnel as the lower stock price would allow me to accumulate hundreds of thousands of shares while I waited for my ship to come in.

While I was waiting and daily watching the stock’s activity, a year went by and then two years went by. Then in 2010, the company called BioSolar announced what I had never heard of before. It was called a reverse share stock split. For the uninitiated like myself at the time, what that meant ultimately, was that my hundreds of thousands of shares had suddenly become a few thousand shares. I didn't think it was even possible that a company could do that, but I found out it was all perfectly legal. So, I had been burned on alternative energy stock for the first time.

I swore then that I would never, ever invest in any kind of solar energy stock again. In fact, in the back of my mind I thought that the shares would ultimately turn around and like the Phoenix of mythology, rise from the dimes and reach that mythical $280 mark. That, and not wanting to lose my money, compelled me to sit on thousands of shares of basically worthless stock for years.

So, to review what we've learned so far in 1999, there were high hopes for an alternative energy technology called hydrogen fuel-cell technology. The pumpers on Wall Street had managed to get its share price in the case of the bigger companies to over $100 share. In the crash of 1999, the bubble that burst took with it the high stock shares of the hydrogen fuel cell companies along with many Internet companies and billions of dollars from the American economy, leaving that money in the hands of those at the Federal Reserve and those with connections to the Federal Reserve that knew that the bubble was about to burst.

We have also learned that there have been a number of other alternative energy companies that over the last decade and a half have burned millions of investors and left millions if not billions of dollars in the hands of insider traders on Wall Street.

So, thus ends the first part of the Hey Dude Where’s my Documentary blog series.

In the next segment, we will discuss the rise of a green energy company called Tesla that seemed somehow to reverse the trend and looked as if it was paving the way for green energy to make a comeback in 2012-13. Please stay tuned.

For more Deceptions, read Deceptions of the Ages by Matthew D. Heines