Tuesday, July 17, 2012

MagneGas Corp. (MNGAD) Could Hit a Home Run with General Motors

A reverse split can be viewed as a terrible thing for many OTC companies, but in some cases, it’s a stepping stone to shareholder value. The vote is still not in quite yet for MagneGas, but the company is holding up pretty well since its recent share consolidation as their company continues to grow and market its revolutionary product. Currently, the company’s ticker symbol is sporting the extra “D” after performing a 1-for-10 reverse split in June. The “D” will be removed in the final week of July at the end of an SEC-mandated 20 trading day period to indicate that the reverse stock split has occurred. At that time, the ticker will revert to “MNGA.”

All that aside, the company has been steadily expanding their footprint in the metal working industry with distribution deals and new companies signing up to use their alternative metal working fuel. The company’s patented Plasma Arc Flow™ process gasifies liquid waste, creating a clean burning hydrogen based fuel that is essentially interchangeable with natural gas. Although the alternative gas has been making its name in the metal space, MagneGas™ has many other uses, including cooking, heating, powering bi-fuel automobiles.

Every investor wants to hear about their favorite company inking a deal with a major outfit and MagneGas could be heading down that path. Today, the Tampa-based company reported that it has begun supplying General Motors (NYSE: GM) with its MagneGas™ fuel. The big auto maker is trialing the fuel, which is delivered from a MagneGas production facility in Michigan, for maintenance and metal-working activities at its Grand Blanc Weld & Tool Center in Flint, Mich.

GM tested MagneGas™, assessing its environmental, health, and safety impacts. It found the gas cut cleaner, faster, and is more cost-effective than acetylene, according to MagneGas.

“We are always in pursuit of technologies that enhance quality and efficiency while also performing well on a holistic business case,” said John Bradburn, manager of waste-reduction efforts at GM. “In its current state, this technology does just that. We’re working closely with MagneGas to discuss possible future applications with potential to reduce our environmental impact.”

Although MagneGas has been building a solid portfolio of clients over the last couple years, layering in a relationship with a world-renown company like GM could be what puts them on the map. Shares dipped as low as $3.65 last week, but have been back on the rise.

To learn more about the company, visit www.MagneGas.com

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