Graphene Investment Advice Needed, Just Not the Stock Market Variety

With research developments coming daily—if not hourly—in graphene, it really was just a matter of time before investment gurus were going to start giving stock tips. This is not altogether bad. It keeps everything focused on the purpose of pursuing graphene developments to create new and improved products that will enable somebody to make some money.

Unfortunately, the field of nanotechnology has a somewhat checkered past with the stock market and with investment gurus. We’ve been subjected to nanotechnology stock indices that thankfully have (for the most part) withered away. And we’ve seen so-called stock market experts proclaim that a huge company with enormous revenues and cash reserves is the same kind of speculative stock investment as a small start-up. It would seem these “experts” not only don’t know nanotechnology, but also don’t understand simple stock analysis metrics like price-to-earnings ratios.

Now it’s graphene’s turn. There has been a recent flurry of investment reports on graphene, motivating some bloggers to comment on the trend. I was finally nudged into a offering my observations now because of a piece that appeared this week in Forbes (“Graphene Stock Investing: What The Pros Think”) . As these articles go, this is a top-notch effort. But I have to quibble about one point—and it’s a big one—graphene at the moment is not a stock market play.

Here is a list of 39 graphene companies, and I don’t believe that there’s one of them on that list that is at this moment publicly traded. So, after the author asks two investment experts what stocks they would suggest for exploiting all the activity in graphene, we get as a response: Enersys, Tesla Motors, and Johnson Controls without giving any explanation of why these companies constitute  good graphene investments. It’s not even clear how they are involved in graphene.

I suppose in the case of Enersys and Tesla it’s a belief that graphene could enable improved batteries for all-electric vehicles. While I have no idea whether these companies are good stock investments or not, I am pretty certain that their fortunes good or bad are not tied to the fate of graphene one way or the other, especially for a hugely diversified company like Johnson Controls.

I support and would even champion articles that could raise awareness of how crucial it is to invest in companies that are trying to develop products based on graphene. We actually need more of them. Unfortunately, we rarely get those kinds of articles and instead get articles like the one in Forbes that are aimed at those interested to know how they can spend their savings on a “graphene stock market investment,” when, in fact, there is no such thing.

While this is unfortunate, it indicates a perhaps more troubling issue. The kind of early, pre-IPO investment that a company trying to develop products based on graphene needs has become increasingly difficult to source outside of governments as large private capital sources still prefer the fast investment turnarounds offered in complex financial instruments. It’s even got graphene’s co-discoverer, Andre Geim, lamenting society’s current attitude of “throw[ing] a little bit of money at something and expect[ing] it to change the world.”

By most estimates products enabled by graphene should really start hitting the market in 2020. With that investment horizon, why are we even talking about the stock market when we should really be discussing how we can support innovation at these early stages. Do that and someday we can actually have publicly traded companies that make products based on graphene.

Image: Erik Vrielink