The Daily Feather — Cold Fusion M&A Update from the Street

You can’t blame two University of Utah electrochemists for trying. In 1989, Martin Fleischmann and Stanley Pons reported that their small tabletop experiment, involving electrolysis of heavy water on the surface of a palladium electrode, had produced anomalous heat of a magnitude they asserted would defy explanation except in terms of nuclear processes. Cold fusion, a nuclear reaction occurring at or near room temperature, was lauded in the media and raised hopes of a cheap and abundant source of energy. It starkly contrasted with hot fusion, known to take place naturally within stars and artificially in hydrogen bombs. Subsequently, many scientists tried to replicate the experiment to no avail. Expectations in the scientific community diminished after numerous failed replications, the retraction of previously reported positive replications and the identification of flaws and experimental errors in the original study. By late 1989, the U.S. Department of Energy concluded that the reported results of excess heat did not present convincing evidence of a useful source of energy and decided against allocating future funding for cold fusion.

On Wall Street, cold fusion is old hat. Investment bankers steer the merger and acquisition (M&A) cycle through economic booms and busts making it synonymous with business cycles. M&A’s gyrations affect inorganic revenues’ gains and losses and CEOs’ mood swings.