Activity in EV and Battery Stocks May Bode Well for Tesla IPO
By John O'Dell June 24, 2010Tesla Motor's upcoming initial public offering might have legs if recent stock market activity among battery makers and other electric-drive vehicle suppliers is any indication.
Apparently spurred by heightened awareness in the ongoing gulf oil-spill disaster of the importance of replacing some of our petroleum consumption with alternative energy sources, investors have been bidding up the stocks of a number of EV-oriented companies.
London's Financial Times reported earlier this week that Massachusetts-based battery manufacturer A123Systems' stock had risen 5 percent in the week since President Obama addressed the nation on the gulf spill and said that it "is the most painful and powerful reminder yet that the time to embrace a clean-energy future is now."
The report also cited a 16 percent gain by New York's Ener1, whose Indiana-based EnerDel subsidiary is another in the growing group of U.S. battery makers.
On Wednesday, things were still looking up, with A123's shares now trading at almost 14 percent above their June 15 price and Ener 1's up 27.6 percent.
Of course the market is nothing if not fickle.
Polypore International, a North Carolina-based global manufacturer of filtration membranes for the lithium-ion batteries that companies like Ener 1 and A123 are making saw its stock price rise 16 percent in the week after the President's speech, the Financial Times reported.
Since then, the price has dropped, though, and as of Wednesday the company's shares were trading at only 9 percent above their June 15 level. Hmm, would that all investments would go up by 'only' 9 percent in a week!
The Dow Jones industrials, a widely watched indicator of market direction, is down about 1.5 percent in the same period, though, so the EV-related stocks are doing fairly well in comparison.
We're not so sure it all has to do with the gulf crisis, though. There has been a lot of news latey - check Edmunds Green Car Advisor to see for yourself - about upcoming EVs such as the Nissan Leaf and extended-range plug-in hybrids such as the Chevrolet Volt, and with the Obama Administration and many foreign governments actively promoting development of electric-drive cars and trucks you don't have to be Warren Buffett to understand that now might be a good time to toss a few investment dollars into the green automotive sector.
Buffett, BTW, has pumped a tidy bundle into a Chinese EV maker - BYD Auto - that recently announced plans to open a U.S. headquarters in Los Angeles in advance of selling electric cars here next year.
Can Tesla go wrong launching a big stock sale - it is aiming to raise as much as $185 million - at such a time?
Probably not, but we won't know for sure until investors respond with their dollars when the company actually drops the green flag on the IPO, an event now slated to happen on Tuesday.
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