Today’s Wall Street Journal says that shares of A123 Systems have jumped dramatically since its initial public offering, despite the fact that the company has never turned a profit. Shares of the company sold at $13.50 initially; they’ve reached $19.70 today.
The newspaper states that A123, which makes lithium-ion batteries for electric cars, is banking on market forecasts from A.T. Kearney Global Management Consultants to divine the future of the electric car battery business. The consultant reportedly has predicted sharp growth: $32 million annually today; $21.8 billion in 2015 and $74 billion in 2020.
If that’s true, a lot of investors should be reaching for the wallets about now.
Still, there’s another piece to the puzzle: A123 has continually lost money during its history, says the Journal. In the first half of 2009, A123 had a net loss of $41 million; last year, it lost $80.4 million.
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