A123 Systems Looks Headed Back to IPO Price
an article to
by Michael Kanellos
Nearly two months after its successful initial public offering, A123 Systems (AONE) seems headed back to its roots.
The company's stock traded at around $15 Friday and dipped into the high $14 range. (I noticed this after getting a stock quote for a report that Tesla may file for an IPO.) A123 went out at $13.50.
Stocks are currently being whacked, so it's natural that the battery maker would take a hit. Still, it's been a wild two months. The company's stock climbed to nearly $20 on the first day of trading, a 45 percent increase. A little while later, it climbed past $28 and stayed in the $20 plus range through most of October.
But November has brought a spate of bad news and a gradual slide downward. First, Fiat (FIATY.PK) announced it had revamped and trimmed back Chrysler's electric car plans. Chrysler had picked A123 to make its batteries. A week later, A123, in its most recent quarterly report, posted a $22.9 million loss but an increase in revenue. On the plus side, the company completed a utility energy storage project in Chile.
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As AONE will found the tricks of handling big instead of small is specially tricky in the battery world.
I could not invest a dollar in the short term future of A123 they are years away of solving patents and cost problems...but they have a beautiful Public Relations office.
Rgds
On Nov 22 10:19 AM Advill wrote:
> This company was successful in the small batteries market, but it´s
> not the same producing for hand tools than 500 pounds units for cars
> moving 150 miles daily.
>
> As AONE will found the tricks of handling big instead of small is
> specially tricky in the battery world.
>
> I could not invest a dollar in the short term future of A123 they
> are years away of solving patents and cost problems...but they have
> a beautiful Public Relations office.
>
> Rgds
Will A123 work in cars? Well, that's an open question. So far, all "real" EVs (that is the only one left, the Toyota RAV4-EV, last sold in nov., 2002) use Nickel Metal Hydride (NiMH) , the only battery that so far is economical in EVs (and thus sabotaged by GM and by Chevron Oil's Oct. 10, 2000 purchase of control and subsequent lawsuit to stop production, settled in Nov., 2002).
Even the "costly and phony" EVs, which are all Lithium and of unknown but high cost, such as the super-costly Tesla, the promised "Volt-hoax", the Nissan Leaf, and others, chose NOT to use A123 for technical and other reasons that would take a page to explain. But they turned away from A123, is the fact of the matter; perhaps they will return...or not.
Apparently, the only public potential customer is the EV version of the Daimler "smart car", but Daimler is a very weak company, technically, so they may change their minds, too, when they find out the issues that, for me, put A123 in question for EVs. Basically, Daimler doesn't care a fig about EVs, so their proposed "use" of A123 may be purely fanciful.
The idea of "grid backup" using $1000/kWh batteries is laughable; $50/kWh lead-acid batteries would make more sense if "peak shaving" via batteries made any sense at all. But it doesn't; the current way to "store" massive amounts of power (and thus to have instantaneous "peak power" reserves) is pumping water up to reservoirs (such as at DWP's Lake Castaic) for hydro generation.
Imagine a 1 mWh battery installation -- LOL -- contrast with a modest 340 mW combined cycle natural gas generators, and you will see that batteries don't really compare in terms of order of magnitude. And the space...cost...longevity! Discharge that 1 mWh completely over one hour, and it gooses the natural gas plant to only 341 mW -- instead, SCE is building cheap 45 mW "peakers".
Lithium remains the only proposed battery chemistry without a recycle value, it is just one way from the mines to the landfill, a completely unsustainable life cycle, IMO.
Well, here goes my advice anyway.
If you actually put your whole 401k into 1 highly speculative stock, then you know nothing about the stock market and should not be in the stock market. There is no such thing as a "sure thing" stock. Us experienced investors know that no one can predict for certain the direction of a stock, especially in any period less than one year. We experienced investors basically play the odds trying to be right more than 60% of the time. Everyone, makes a bad stock pick on occasion. Anyone who says they haven't is lying.
The main reason I take the risks of investing in individual stocks is the sport of it, not because I’m anxious to get rich quick so I can spend the rest of my life doing nothing which seems to be your goal. I enjoy riding this wild horse of the stock market seeing if I have what it takes to out-smart other people. If you are “not into” stock picking like me, you do not belong in individual stocks. Buy a market index fund or something else boring.
If you want to understand what is going on in the battery world in this web is John Petersen who is one of the most informed persons in the field.
In my case i have VLNC since 2006 and i´m losing 65% of my investment , the AONE case is a case of a Hype IPO (the first since the problems last year).
Frankly speaking in your case (retirement fund) buy something solid right know, AONE can survive or not in 10 years so you better bet your 401k in something more solid and bored like
Exxon, J&J, GS,GE or WFC, reinvest your dividends in the same stock as it is pay and wait 25 years you will have an interesting amount in real long term inflation dollars.
Rgds.
On Nov 22 02:07 PM sunstar wrote:
> I feel like investing in Chinese solar stocks like TSL CSIQ YGE and
> STP are my ticket to financial serenity. Anyone else agree? Please
> let me know your opinion. Thanks and have a great day.
On Nov 22 02:00 PM sunstar wrote:
> I invested my entire 401k into AONE I hope I've not made the mistake
> of my life .If someone could offer advice please e-mail me at oceansunstar@gmail.com
> thank you
Energy storage belongs in the home. The rate for electricity should be very low if you buy your power at one steady rate [to charge your battery], and a much higher rate when you need a lot of power in a few minutes [if you have no storage capability.] This will make the entire system much more efficient. A 45 MW peak power plant has no heat recovery steam generator and is a huge waste of good fuel. Think about it: everyone gets home, cranks up the air conditioner and puts diner in the oven. So this gas turbine at the edge of town has to start up and generate the electricity. But it throws 900 degree combustion gas up in the air... so more people have to crank up their air conditioners. It's madness. Energy storage belongs in the home, and the car. It needs to be safe and reliable, small and light weight. And it needs to be produced in huge volume. Come on people, get with the program.