A123 IPO & Lux Research

The big news this week: the long-awaited nanotech and cleantech battery company, A123 a spin-out from MIT had a smashing IPO approaching $2 billion in market cap.

Here’s Lux Research’s take as covered by Nature:

University spin-out opens trading as a billion-dollar company.

By Katharine Sanderson

More shares in battery manufacturer A123 were sold than initially expected.

One university spin-out company has suddenly turned investors batty for batteries. A123 Systems, a rechargeable-battery manufacturer founded in 2001 by materials scientist Yet-Ming Chiang and colleagues from the Massachusetts Institute of Technology in Cambridge, got a flying start to its life as a publicly traded company.

A123, based in Watertown, Massachusetts, first announced its intention to offer public shares in August 2008, with predictions that they would sell for between US$8 and $9.50. But yesterday, they flew off the shelves at $13.50 a share, with around 28 million shares being sold — 3 million more than expected. This bagged the company a cool $380 million ahead of its first day's trading on the NASDAQ stock exchange today. "It's very exciting news," says John Petersen, a lawyer specializing in energy-storage companies at law firm Fefer, Petersen and Cie in Barbereche, Switzerland. "I think the next 20 years are going to be times of immense prosperity for the battery industry," he says.

The cash boost comes shortly after A123 received a $249-million grant in August this year from the US Department of Energy to develop batteries for electric vehicles. The company has also raised more than $350 million in private investments. Add to this the money from the shares, a $69-million investment from General Electric and $100 million in refundable tax credits from the Michigan Economic Development Corporation, and A123 Systems becomes a billion-dollar company. The firm also applied for a $1.8-billion loan from the US government in January this year, with the intention of building a mass-production facility in Michigan.

"It's a very solid company poised to continue to grow," says analyst Michael Holman from Lux Research in New York. But, cautions Holman, "There are a lot of risks, particularly in the electric-vehicle market for A123."

A full copy of the article can be found on the Nature website.

The Hero vs The Hysterics & West, Wilson, William

A culture gets what is celebrates. With the nation obsessed over outbursts from Wilson, West and Williams (congress clown, raucous rapper and tennis terror), little attention was given to honor a hero who prevailed against hysterics: Norman Borlaug. He lived the ideal of 17th century Spanish philosopher Baltasar Gracian that one should aspire to be a hero, rather than merely appear one.

Despite renewed cries of Malthusian limits of our resources in the face of a growing population, Julian Simon had it right in challenging conventional wisdom with his own wisdom that the one inexhaustible resource is human ingenuity.

Here’s Greg Easterbrook writing in the WSJ on ‘The Man Who Defuse the ‘Population Bomb’: One of America's greatest heroes remains little known in his home country.”

Norman Borlaug arguably the greatest American of the 20th century died late Saturday after 95 richly accomplished years. The very personification of human goodness, Borlaug saved more lives than anyone who has ever lived. He was America's Albert Schweitzer: a brilliant man who forsook privilege and riches in order to help the dispossessed of distant lands. That this great man and benefactor to humanity died little-known in his own country speaks volumes about the superficiality of modern American culture.

Norman Borlaug

Born in 1914 in rural Cresco, Iowa, where he was educated in a one-room schoolhouse, Borlaug won the Nobel Peace Prize in 1970 for his work ending the India-Pakistan food shortage of the mid-1960s. He spent most of his life in impoverished nations, patiently teaching poor farmers in India, Mexico, South America, Africa and elsewhere the Green Revolution agricultural techniques that have prevented the global famines widely predicted when the world population began to skyrocket following World War II.

In 1999, the Atlantic Monthly estimated that Borlaug's efforts combined with those of the many developing-world agriculture-extension agents he trained and the crop-research facilities he founded in poor nations saved the lives of one billion human beings.

Read the full article on Norman Borlaug from the WSJ website (click here).

Water Tech & A School Grows in Brooklyn

A big thank you to Vince Capri who earlier this week in Chicago on behalf of the Nanobusiness Alliance presented a check, made out to Coney Island Prep, to me after my opening keynote. What a class act.

I hold the deep belief that kids, especially inner-city kids, need two things: the right heroes and a deep desire to learn. Usually the former results in the latter. Nearly two years ago, I was recruited by passionate and visionary school founder, Jacob Mnookin, to become founding Chairman of Coney Island Prep--the first ever charter school in my native Coney Island Brooklyn. We opened our doors last week to 90 5th graders for our inaugural class of 2021 (their future college graduation date set in their minds now), adding a new class every year until we reach grades 5-12.

The governance, staffing, financials, marketing and strategic decisions are not so different from high-tech startup boards I sit on, but arguably the stakes are higher. Entrusted with children’s future and maximizing their (and their families’) chances of success in life is extraordinarily fulfilling.

A final reminder for Tuesday’s private invitation and chance to listen to Lux Research’s webinar: “Lux Research Water State of the Market: Global Energy - Unshackling Carbon from Water” on Tuesday, September 15, 2009 11:00 AM - 12:00 PM EDT Register by clicking here.

Dean Kamen, Water Invitation & A123 Battery IPO

Here’s three things for your Labor Day weekend.

First, join me and Dean Kamen at the NanoBusiness Conference next week in Chicago at www.nanobusiness.org

Second is a private invitation to listen to a Lux Research webinar: “Lux Research Water State of the Market: Global Energy -- Unshackling Carbon from Water” on Tuesday, September 15, 2009 11:00 AM - 12:00 PM EDT Register here: https://www2.gotomeeting.com/register/269154627

The huge water footprint associated with energy production plays second fiddle to worries about carbon dioxide output in the popular imagination, but it is a vitally important consideration in our increasingly parched world. New energy technologies – from advanced methods of extracting fossil fuels to low-carbon renewable energy – may look appealing, but they exacerbate water worries, creating ugly trade-offs between carbon and water. As water stresses, multiply energy technologies’ water intensity will often play as great a role as their carbon footprint in determining the future makeup of the global energy mix.

In this webinar, Lux Research will examine conventional and alternative fuels and electricity generation and investigate the myriad of technologies – including water reuse and recycling, increases in energy production efficiency, and large-scale distribution – and answer the following questions: How much water is used today to produce electricity and fuels through conventional means? What is the relationship between water intensity, carbon intensity, costs and reliability for alternate energy sources? How does the water relationship affect the viability of biofuels and alternative methods of extractive fossil fuel? What technologies and approaches are available to reduce energy related water intensity while allowing for a reduced carbon footprint? What are the implications of water intensity on the future roll-out of energy technologies? Which companies stand to win or lose and how will this affect investors?

Third, here’s fellow Forbes columnist Mark Mills citing Lux Research’s battery team in his newest piece: “Battery IPO Could Recharge New Issue Market”

“Confidence, the Rorschach of economic indicators, is a weird thing. Easier to recognize than define or measure. We may soon learn something about confidence in our economic future via the market's reaction to the forthcoming IPO of A123, a Boston-based energy green-tech company just over half a dozen years old with cool new MIT-derived battery technology.

The Conference Board's Consumer Confidence Index (CCI), benchmarked as 100 in 1985, dropped to 65 in 2008 and plummeted to 25 earlier this year, even lower than post 9/11. We're a long way from the heady days of confidence exhibited during tech mania when the CCI approached 200, but the index has been tracking up recently, hitting 47 in July and 54 by late August.

For calibration; the index was 100 in 1985, the year Nintendo came out; one year earlier Apple had launched the Mac at a time when only 40,000 people in America used cell phones.

Confidence both reflects and creates the economic future we want more than any single characteristic of the human enterprise. Of course confidence is what drives people to create new companies, and jobs, to compete with big established guys, and, apropos of emerging from our Great Recession, let us not forget that small businesses with one to 499 employees account for nearly two-thirds of job creation..."

The full article can be found on Forbes.com, to be linked to the article click here.