Gediminas Jasionis

Mass Megawatts Wind Power Inc. (OTCBB: MMGW) Stock Fueled By Licensee's Contract

by Gediminas Jasionis November 22, 2009
energy_landing.jpgNews have been driving the stock of Mass Megawatts Wind Power Inc. (OTCBB: MMGW) on Friday. The price shot up as news depicted $5.8 million contract signed by the company's licensee Electric City Wind Power Corp.

Following the contract Electric City will be selling Mass Megawatt's Multi-Axis Turbosystems with a total power of 3 Megawatts to the architectural firm led by John Gianacopoulos. The systems will be sold in installments of 0.5 and 1 Megawatts in 2010.

The company has historically generated only miniscule revenues and there were concerns about its business future altogether. The sales made through licensee might give somewhat of a boost to their own performance, but we will not see the mentioned $5 Million at the top line of their income statement the coming quarter.

Details on the Mass Megawatts participation in this deal are spared, and my guess is the company will only provide the product, thus without any further actions getting only a slice of the cash mentioned in the contract. Remember that the contract is not directly made by the company.

Their stock price has depicted the situation quite well - strong volume, big volatility and, except for the initial gap, the price has actually closed lower for the day. Although the beginning of the week might give some surprises, in general the price should retrace lower and might even fill the Friday's gap.

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