A123 Systems (NASDAQ:AONE)
CAPS Rating:
The company designs, develops, manufactures, and sells rechargeable lithium-ion batteries and battery systems.
The company designs, develops, manufactures, and sells rechargeable lithium-ion batteries and battery systems.
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Recs
A123 loses money on every unit that they sell. They have a short client list, that's going to get even shorter in the near future.
This is a win big / lose big stock. If, and this is a tremendous if, the company is successful in developing an excellent battery for use in plug-in electric vehicles or a storage device for solar / wind power it has the potential to be a big winner. The government certainly wants them to be successful, it's pouring tons of money into the company.
I am betting however that the stiff competition from larger, better funded, established foreign competition in the battery area will develop better products than this U.S. start-up.
Deej
Perhaps more research is in order here. They already developed an excellent battery. The new factory will improve the margins. Look at the investors in this IPO to find an excellent list of stand-by clients waiting on the new factory to go up. And after this IPO there may not be better funded reasearch labs in the US or overseas.