Get Ready for the A123 Systems IPO
Sure we’re saving our pennies to buy a Chevy Volt, the economy is sputtering, and GM just lost $3.3 billion this quarter.
But wouldn’t it be great to tap into that future $30 billion lithium-ion automotive battery market?
The news li-ion battery investors out there have been waiting for is starting to trickle in.
Watertown Massachusetts battery-maker A123 Systems, the GM Volt partner who we just discussed in the last post, is reportedly about to file for their IPO according to a blog post citing inside sources.
A123 has already raised over $132 million in venture funding and reportedly have “essentially completed” their IPO filing. We are told the S-1 should arrive at the SEC within a month, and that the “road show” may take place in September. Goldman, JPMorgan and Merrill have been chosen as the bankers.
Expected value $1 billion.
Could this be another Google? Your guess is as good as mine.
Source (Private Equity Hub ) and (Innovation Economy )
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37 Responses to “Get Ready for the A123 Systems IPO”
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I’m in.
Ive had a look in my crystal ball and that is not fortuitous.
CPI would fund that GM battery job out of petty cash.
It sure would be nice to get in on that IPO, but like most IPOs only the insiders get to buy at the IPO price while the rest of us are left out in the cold.
But for them I hope they get the Volt contract and make lots and lots of money. That will spur others to make the Li-Ion batteries and drive down the price faster than anything else.
Funding and being the talent behind it are two very different things.
Well I sure hope that your guess is better than mine! It wouldn’t be hard.
I’m in for 100 shares, just to be in the game.
Can we start a waiting list for the IPO?
Interesting opportunity for GM to buy-in to A123 and simply own the technology to license to other manufacturers. THink about that one… It would be interesting to know what the contractual arrangements are for the packs in the Volts also.
Doesn’t GM have some excess cash sitting around (although I do understand they’re losing a few million every quarter)–and why the hell the stocked popped today I have no clue.
I did. Thats why I’m in
I’m worried about Exxon mobile, or one of the other oil giants to buy it all just to bury the company.
Just as an analogy, condider the personal computer.
In the begining was IBM.
But new entrants arrived rapidly and feasted until competition forced amalagamations, eg Digital/Compaq/HP. The winner was the company that was making a fortune out of printers and had more cash.
lol.
A123 has great chemistry now but there will be new chemistries
The market will segment and prices fall.
Would GM want to buy into that scenario?
Dont know.
GM should buy all of it. That would end GM’s battery technology problem and A123’s production problem. They’re already working together on cell technology.
The stock popped today because the loss was much less than expected. The $3.3 billion includes one-time charges. After those the loss is only $500 million which is not half bad considering the US auto market is as bad as it’s been since the early 90’s, American Axle is striking, Delphi is in bankruptcy and GMAC is losing loads of money.
Ford is currently worth about 45% more than GM. That will not last.
I think I am buying. Even if not as an investment, to own a piece of history. Imagine buying Microsoft at its IPO!!
I don’t think that A123 is the Google of energy storage. I think they’re the Netscape. It seemed like the web was all about the browser until it turned out to be all about search. It seems like EVs are about the battery today, but the solution that brings electric vehicles to the mass market may not be a battery at all.
Even if it turns out that LiFePO4 is the ultimate answer, then I doubt very highly that the supreme overlords of global capitalism will allow an upstart to protect a patent monopoly on the basis of the new energy economy, Energy is the most politicized sector of the economy, and the shadow government will distort the market to serve its interests.
If EEStor’s device works, it’s curtains for much, perhaps all, of A123 System’s business. This I would classify as an extremely risky IPO
to invest in.
The demand for this type of product will be so great over the next decade that even if EEStores or MIT’s ultracap turn out to be superior in every way it still doesn’t mean doom for A123. There will be a ton of smaller applications that will still need a supplier of Li-ion batteries and such do to limited supply of ultracaps.
You can see the same thing in the solar panel market with thin film vs old conventional panels as well as the battery market with Ni metal hydrid battery companies still have plenty of business (and a growing business I think) even tho li-ion is now on the market.
Sure it will eventually take a down turn probably but it takes many years.
#14
From everything we’ve seen so far, I’d be inclined to call it Ether-stor
#11 Dan wrote:
“The stock popped today because the loss was much less than expected. The $3.3 billion includes one-time charges. After those the loss is only $500 million which is not half bad considering the US auto market is as bad as it’s been since the early 90’s, American Axle is striking, Delphi is in bankruptcy and GMAC is losing loads of money.”
Does this even remotely make sense…the stock popped? Sometimes, investors are just…well, idiots. We all want the Volt, we are hoping for the best…but who amongst us would willingly buy these shares? (or at least to admitting to it on the record, lol)
/dead cat bounce
I dare anyone to suggest profitability at any time in the future that you also couldn’t go thru college, take a year off and tour Europe, then go through medical school before.
For the record, I would consider investing a little in a A123 IPO offering.
Unlike…well everyone else, they actually make and sell stuff! You want to run your car on a lith battery…A123 is your huckleberry, good enough for me.
They have the background, the workforce, the capacity to produce and they are, if anything…overfunded. Quite a rarity..
For those who think a breakthrough in either batteries, supercaps or fuel cells would kill the other two, you are wrong. There will ultimately be a combination of all three of these devices in future vehicles, so all bets are on.
Static #17
“but who amongst us would willingly buy these shares? (or at least to admitting to it on the record, lol)”
Well, I am. It has crossed its 10 day, 20 day and just crossed above its 50 day moving average.
I believe that historically, we will look back and see this as a buying opportunity. But time will tell.
Hey Statik, I agree.
I think it would be foolish to underestimate the minds behind A123.
But let everyone else think that investing in the most financially successful new technology start-up in years is a bad idea. And I don’t think it matters that GM is only one of many car companies who will be using A123 batteries.
Personally I think ANY investment in companies leading the coming energy revolution is probably a bad idea.
I mean…why would we want to see a good return on our investments?
All I know is demand right now is rising sooo much faster than supply. You figure it out.
A123 is a good news. I do not know if you guys remember EnerDel, Inc. I learned about this company here. At that time it was trading under the symbol ENEI and it was trading for about $0.40. They just changed the symbol to ENON and made a 1 for 7 reverse split. It is trading now for $7.20. There is no gain as a result of the split, but just so you know, it was once a penny stock and now it worths $ 7.20. I think i will take some of the Volt saving once September is here and I will go to sleep with A123 IPO. And like Static #17 said, A123 is your huckleberry.
Just a few comments:
1) If the vehicle and grid battery market is ONLY worth $30 Billion in 10 years I will eat my A123 T-shirt.
2) A123 executives are too smart to give away controlling interest in the company. Unless of course they know the technology is not as good as they say. Then they will sell everything and go laughing all the way to the bank.
3) There are so many different technologies about to compete in this market that it might be unwise to invest too much into any one battery technology. A portfolio or a battery money market (should exist soon) might be the way to go. If EEstor’s new product is only 50% as good as they say you can say good bye to lithium-ion. How about the 10X silicon nanowire cell? If that works out… Anyway, I may invest just to reward those guys for a job well done. Just the entertainment value I have received since their public announcements a while back have been worth quite a lot to me.
4) Thank you A123 and please don’t let all that wealth go to your heads. Yes, you will be able to have luxurious lives and never need to work another day but I hope you not only remain focused but even intensify that passion. Think Bill gates. Did that guy even slow down during the rise of Microsoft? If he did, I never heard of it.
5) What are you guys at A123 going to buy first, besides a well deserved trip to the Bahamas? Tesla? Zero emission custom designed mansion that has the latest advances in passive and active solar technology? Hummm.
Good luck with the IPO!
I meant battery mutual fund.
I’m just wondering. If they are flush with cash, why do they need to go public?
I too think of Microsoft when I think of this IPO. I’m in.
I’ll use my Roth so that I can keep the money (at least that is how I understand it).
I meant to say, “keep the money that I earned”.
#26 Rashiid Amul
Why do they need to go public? Greed, lol. Tasty options for everyone, lol. Enough cash to have their HQ heated on burning piles of twentys? hehe.
I’d have to see the prospectus, but if it looks as good as the outlook I will pick up a little.
Cautionary Note: Hopefully no one goes out and dumps their entire savings in this. Just because something is said on the ‘internet’ doesn’t mean anything…probably less actually. I’m a fairly active trader, and I can’t count the number of times I’ve seen people chase down a stock with everything they have…or worse, borrow to invest, ouch.
If it looks good, I might be persuaded to put 2% of my portfolio in it, then slowly dollar cost average increase my exposure over a year or two, provided there is growth. Up to a max, MAX of 5 percent. Hopefully it takes off and skewers my percentages and I am forced to take back my initial investment while the profit continues to multiply. (FYI, I’m 70 percent cash/gov’t sercurities(not American)–scary times)
#28 statik , very sound investment advice.
I’ve been around long enough to know to avoid many an IPO pump and a dumps without careful analysis. This one is going to be one of the worst kept secrets. Tesla is another. Wait for the prices to stabilize and then do the math.
Does A123 have any advantage over other Lithium-Phosphate makers (particularly Valence)? Is there a lawsuit about who owns the tech?
Perhaps they need the cash to ramp up US based MFG. With the dollar spiralling down MFG in US of A is becomming cheaper comparatively & if I m not mistaken didn’t A123 recently have a falling out with their Chinese MFG base (tech theft). Sounds like they might have wised up to move production where they can actually protect their patents, China definately is not that place! Anyone have any inside info on this?
#30 OhmExcited
Your absolutely right, with any IPO you have to be ultra-ultra careful. Most times it is a ‘crap-shoot’ I don’t know that this is going to be ‘that overhyped’ it is still relatively obscure.
I’d compare A123s IPO to some of the more recent IPO offerings in the solar industry, they did well…but not crazy ‘Palm-like’ action. You remember Palm’s IPO, Ohm? Couldn’t believe what the market was pricing that dog at. There was no way to justify that market cap. That was great for me…on the down side. My first ‘real’ winner in the options market, just a few thousand and a 6 month put…turned out ’scrumtrulecent’…I still get goosebumps thinking about it, lol.
Like I said, if you like it and got to have it, buy a little, ratchet up your exposure slowly over time as it makes sense to…and for goodness sake, don’t put in anymore money than you are comfortable to lose. (=
As someone who has a fairly broad basket of battery stocks and related companies this IPO will be something I will look at carefully. No individual battery maker is a sure thing and while A123 has a nice technology with some good alliances they also have a lawsuit over IP still hanging over their heads. Price per expected future earnings per share will be important to analyze when the time comes (and it is available to us in the maddening hoard). I fear they will too pricey for me. I’ll say this much from experience investing in this sector: a battery stock is not for those with weak stomachs. The price gyrations can be a bit of a roller coaster ride and it is impossible to know which way is next. Some have made me a lot, some have gone up and come back down. Some then back up again! Either trade them or buy and hold for years and indeed do not invest more than you can afford to lose.
Investors say “How much coiuld I loose?” You could loose it all.
Think “butterfly”
If you trade…you know what I mean, lol.
Rocky,
Yup. You could lose it all.
And how much could you gain?
And, after full DD (with information not currently available) how likely do you believe each outcome is?
If it is available priced such that you believe the risk of losing it all is less than the possibility of having at least a two bagger then, as part of basket of such speculative plays, it is a reasonable choice. (After you’ve maxxed out on your 401K and funded your kids 529s’ of course!)