Editor’s Note – A123 systems has Gururaj Deshpande as Director. Gururaj is one of the richest Indian billionaires in the US and is the founder of the US-based Sycamore Networks . Gururaj also owns a substantial stake in A123.
A123’s smash-hit IPO could herald more green debuts
A 50 percent leap in the shares of lithium-ion battery maker A123 Systems Inc on their first day of trading looks likely to jumpstart the market for clean-tech share offerings.
The Watertown, Mass.-based A123 Systems is now worth over $1.9 billion, a striking valuation for a company that has yet to make a profit and still needs large-scale commercialization.
Industry executives and experts said A123’s success shows investors have an appetite for green technology companies that lose money, but have tremendous potential.
So the stock’s first day jump, which is the second-best performance for a debut stock in 2009, should encourage more venture capital-backed clean technology companies to go public, they added.
“This is an interesting time for the market because there are several (clean-tech) companies that have been growing very nicely,” said Faysal Sohail, managing director of venture fund CMEA Capital, which is an investor in A123.
Sohail declined to comment specifically on A123, but said the whole environment is creating opportunities for clean-tech companies and expects 2010 to be a busy year for green IPOs.