This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Clean Tech Stock Losers: A123 Systems

NEW YORK ( TheStreet) -- A123 Systems (AONE) is experiencing heavy selling volume on Tuesday after Wunderlich Securities analyst Theodore O'Neill downgraded the lithium ion battery maker to a sell.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

For some time already the Wunderlich analyst has been skeptical about the expected pace of electrical vehicle adoption and the ramp in the lithium ion battery makers' operations.

Inherent in the A123 Systems downgrade on Monday is Wunderlich's modeling of a slower ramp in the electrical vehicle business in both the U.S. and Europe. As a result, the Wunderlich analyst sees no choice for A123 Systems but to head back to the capital market to raise more money by early 2012 at the latest. The analyst is forecasting a cash balance for A123 Systems of less than $10 million by the end of 2012.

The Wunderlich analyst wrote in his A123 downgrade on Monday, "The major car makers are unsure how U.S. drivers will use electric cars and which option will be most popular is a big unknown, so until then or until the manufacturers are forced to by law, the ramp will be halting and slow. This will lengthen the time it takes for A123 Systems to turn profitable and will almost necessitate another capital raise in late 2011 or early 2012."

Wunderlich lowered its A123 Systems price target to $6 from $9.

A123 Systems shares were down 7.5% on Monday morning and its average daily trading volume of 2 million shares had been surpassed in morning trading.

Year-to-date, A123 Systems shares are down 65%.

There has been lots of press garnered of late for electric cars with the debut of the Chevy Volt and the Nissan Leaf. In addition, major fleet buyers representing some of the biggest corporate brands in the U.S. have been talking up electric car purchases.

This fall General Electric (GE - Get Report) announced a five-year electric car fleet purchase plan, beginning with the Chevy Volt. GE is an original financial backer of A123 Systems, though A123 Systems does not have its battery technology in any existing commercial car. The Volt is powered by Asian battery maker Compact Power, an affiliate of LG Chem.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
GE $27.02 0.00%
AAPL $127.60 0.00%
FB $83.09 0.00%
GOOG $535.38 0.00%
TSLA $205.27 0.00%


DOW 18,034.93 +208.63 1.17%
S&P 500 2,100.40 +19.22 0.92%
NASDAQ 4,994.6020 +62.7870 1.27%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs