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Google’s forthcoming smart phone, apparently, has the power to change fortunes. Following speculation that Chinese battery manufacturer BAK (CBAK) won the supply contract for Google’s phone, BAK stock rose 63 percent. After BAK’s chief financial officer Tony Shen denied these rumors, BAK stock dropped 24 percent and is at 2.79 at time of publishing (9:45 AM PST). The amazing thing here is that BAK hasn’t announced anything else of note. BAK’s valuation has been changing around speculation that they might supply batteries for a single model of phone.

Despite the 63 percent gains on 12.29, BAK is down 26 percent over the last three months.

The phone in question is the Nexus One. Following weeks of speculation, we are expecting release information by mid January, probably at a press event Google announced on January 5. The phone will likely be available unlocked and unsubsidized from Google, which would be the first time Google has sold hardware to consumers. The unsubsidized price is $530.

It will also be available subsidized with a two year contract from T-Mobile. The T-Mobile plan will include 500 voice minutes with text and data included for $80 a month. The phone will be built to Google’s specifications by HTC, unlike other Android phones that were built as manufacturers thought they should be. This is all according to a leaked internal document.

BAK has posted two straight years of losses. About two thirds of their business is in cell phone batteries. Another rough third is in laptop batteries and the rest is tied up in its expansion to the automotive battery business. To date, BAK has not been certified to supply OEMs and focuses on the replacement business. A week ago, CBAK announced it had won a $1 million contract to supply bus batteries in China.

If anyone doubted the power of Google before, let them now be convinced. Nothing is official about the Nexus One’s release or even its existence. None the less, rumors about who might supply the batteries for the Nexus One are driving stock prices. The Droid may have disappointed some but the Nexus One might just quietly sidle up into iPhone territory, sales wise.