A123 (AONE) raised $378 million, almost $100 million more than expected. The company increased the deal size by almost 10% even after raising the offering price 50% from its initial range. So far the share price is holding up at $25.77, almost twice the opening share price of $13.50.
The eight-year-old Boston-based lithium ion battery maker has raised over $300 million in venture capital and has a deal to supply batteries for Chrysler's EVs. One of the biggest recipients of stimulus funds for battery manufacturing in the US, DOE awarded A123 $250 million in matching grants this summer. A123 plans to locate a manufacturing plant in Michigan, which offered $100 million in tax credits.
"A123 has the right mojo for a successful tech company: brainiacs with state-of-the-art technology spun out of MIT, adults in charge, a bulging R&D budget, real revenues from a fundamental (and long-sought) new product, and dead center in the global frenzy to green our energy economy," says Forbes. On the other hand, A123 burns through cash, showing losses of $146 million since it was founded.
Energy storage is bound to be a huge growth area, but competition is fierce - it's anyone's guess as to which companies will make it in the end. In its IPO filing, A123 pointed to data that project the number of hybrids and EVs will expand from 19 models in 2009 to over 150 models in 2014. A.T. Kearney says the market will grow to $22 billion by 2015 and $74 billion by 2020.
Again, the significance of the IPO isn't so much about investing in battery makers - there are plenty of profitable companies that are safer to invest in.
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