Bye-bye A123–a short-term trade maybe but I’m dropping the stock from my watch list
It’s time to remove A123 Systems (AONE) from Jim’s Watch List. A short-term trade, maybe, on hopes that projected second half revenue will materialize. But long-term the company, a developer and manufacturer of lithium-ion batteries for electric cars and the smart utility grid, has a serious chicken-and-an-egg problem: No matter how good the company’s battery technology may be, the electric car market has been much slower than expected in getting off the ground—and without that market A123 Systems just doesn’t have enough customers to sell to.
A123 Systems went public in 2009. Investors immediately bid up the stock believing that the company had revolutionary technology and that rising oil prices would lead consumers to adopt electric cars. The stock opened at $13.50 and quickly ran up to $28 a share. But two years later it sits below $5.
The problems at A123? Read more
The IPO window opens and battery maker A123 Systems gets set to jump through
The financial crisis has been hard on IPOs, the initial public offerings that young companies use to start tapping the public stock markets for capital.
In the six months after Lehman Brothers went into bankruptcy, a grand total of two companies managed to go public. In December 2007, before the financial market meltdown, nine companies went public in a single week alone.
Right now, though there are five companies lined up to test the market for new stock offerings: Artio Global Investors (an asset management company), Seclect Medical Holdings (a hospital operator), Vitacost.com (an online vitamin retailer), Shanda Games a Chinese online computer game company), and A123 Systems.
It’s battery maker A123 Systems that interests me the most. Read more
