A123 Systems IPO roars out of the gate
On September 21 I wrote that if the initial public offering for battery maker A123 Systems turned hot, it would enable a wave of private companies locked out of the public markets to finally go public. (See http://jubakpicks.com/2009/09/21/the-ipo-window-opens-and-battry-maker-a123-systems-gets-set-to-jump-through/ .)
Well, the A123 Systems IPO was not just hot. It turned red hot.
The offering priced at $13.50. That was well above its expected range of $10 to $11.50, which, was in turn a big increase from the original projections of $8 to $9.
The stock got that higher pricing even though underwriters had increased the offering size to $28.1 million shares from 25.7 million.
Even that increase in supply wasn’t enough to meet demand, I’d say, because when it finally started trading, shares first changed hands at $17 a share. Shares were trading at $19.90 at 2:14 p.m. (ET) as I wrote this.
If that’s not enough to encourage other companies to test the IPO waters, I don’t know what is.
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Thanks for the post Jim…another nice trade! I’d love to hear your comments on the new Michael Moore film about Capitalism.
Jim- I’ve been singed more than once by these red hot rockets [the old saying: "once burned, twice stupid..." ;] so I will wait for the (almost) inevitable flame-out and fall back to earth.
I did carefully read your assesssment of A123 a few weeks ago, so I will be watching for it [under $10??] a few months down the road.
It looks like a fine long(er)-term spec to me- if (when) the price becomes right. Thanks for the heads up.
Jim, What do you think is the practical jumpin price for a 2 year investment
dversify, take a read through the perspectus to see what the lockup period is. Venture capitalists put a lot of money into A123 and almost nobody sold shares during this offering. They’ll be looking for an exit when the lockukp period ends and that’s usually a good time to look to get in since the selling often depresses the price.
I guess it is just me: I do not buy into this hype. I still want to see the profit and leadership position on the market. While there are claims that A123 battery technology is superior, most of those claims are originating from those, who are somehow associated with the company. There are, as always, pros and cons, which are nicely explained in an article published on wikipedia. Once you get rid of the hype about their technology (the best “detailed” description I saw so far is that it is “nanotechnology, which is coming directly from MIT”), there is nothing else there to attract my attention as a potential investor (no profits, no large-scale production, tough competition from everyone else).
Well … Their stock is down, as I write this. I guess, I am not alone.
“Of the remaining shares, 70,631,492 shares of common stock will be subject to a 180-day contractual lock-up with the underwriters, and 218,304 shares of common stock will be subject to a 180-day contractual lock-up with us”
So Sept. 24th + 180 days = March 24th ish