A123 Is Proof Some Companies Go Public Too Soon
By Dana Blankenhorn: Venture capitalists know that new technologies are risky. They know things can go wrong. They sort of expect it.Public investors don't understand this. We expect that if we're to put our hard-earned dollars and dimes into an investment, things will work out.So we come to A123 (AONE), a classic case of a company that went public too soon. The producer of car-sized lithium-ion batteries, based in Massachusetts, went public near the end of 2009 amid great fanfare. Since then it has lost over 90% of its value.Why? Because the manufacturing techniques on its Nanophosphate lithium-ion batteries were imperfect. Enough prismatic cells were coming up bad at its Livonia, Mich., factory that just about any battery it was shipping was subject to early failure.The batteries are used in the Fisker electric car, and caused one used by Consumer Reports to go bad after a relatively short drive.Complete Story »
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