Will car battery maker A123 Systems jump start the IPO market?


A car battery maker based at the Massachusetts Institute of Technology is poised to jump start the market for initial public offerings (IPOs).

The company, A123 Systems (AONE), makes batteries for electric cars, went public Thursday morning at $13.50 a share, with the goal of raising $380 million. A123 -- which counts General Electric (GE) and Motorola (MOT) among its backers -- got started in an effort to commercialize nanotechnology research at MIT. And it's just won a $250 million grant from the federal government to build a production facility outside Detroit.

Regrettably, it suffers from one little problem: it is losing lots of money. Specifically, it lost $40 million in the first half of 2009 on $43 million in sales, and lost more than $80 million last year on sales of $68.5 million. It faces significant competition from companies in Asia -- including Korea's LG -- which beat out A123 for a contract to make batteries for General Motors' Chevy Volt.