UP 100% on 200k??? It's Alive!!!I saw this yesterday in Canaccord's MC:
Sociedad Quimica Y Minera (SQM : NYSE : US$39.45), Net Change: 0.35, % Change: 0.90%, Volume: 1,018,548
FMC (FMC : NYSE : US$57.12), Net Change: -0.20, % Change: -0.35%, Volume: 612,926
Rockwood Holdings (ROC : NYSE : US$22.38), Net Change: 0.82, % Change: 3.80%, Volume: 273,181
We LOVE market forecasters. Lithium-ion battery maker A123 Systems announced on Tuesday that it increased the estimated priced range of its upcoming IPO to $10.00-11.50 a share, from $9.00-9.50 a share. The firm now plans to raise up to $300 million by offering 25.7 million shares on the NASDAQ under the trading symbol AONE. Shares are expected to begin trading later this week. We did a quick perusal of their prospectus to see if we could find any juicy tidbits on the Lithium market. As is standard in prospectuses, the company quotes some third-party market research on the expected growth rates of the industry. While the company makes lithium-ion batteries for three primary segments: consumer products, electric grid, and transportation, the company highlighted research relating to the transportation market, the company's largest market. Based on data from IHS Global Insight, it is estimated that the number of Hybrid Electric Vehicles (HEV), Plug-In Hybrid Electric Vehicle (PHEV), and Electric Vehicles (EV) have with an annual production run of at least 20,000 vehicles will grow from 19 models in 2009 to over 150 models in 2014 and over 200 models in 2019. According to A.T. Kearney, the global lithium-ion battery market for automotive application in HEVs, PHEVs, and EVs is estimated to be $31.9 million in 2009. A.T. Kearney projects that this market will grow to approximately $21.8 billion by 2015 and $74.1 billion by 2020, based on a moderate drive for change influenced by increasing governmental regulation, emerging powertrain technology, changing consumer demand and OEM product strategies toward more fuel efficient vehicles. So the dollar value of the lithium-ion battery market is expected to grow by over 2300 times in the next 11 years. That would appear to indicate, assuming the dollar value per pound of lithium used remains the same, that the global demand for lithium in this market is also set to grow by over 2,300 times by the end of the next decade. We also note, that assuming the company gets its IPO priced at $10.00 per share, the company would end up with 96.8 million shares outstanding, providing a $968 million market cap. Given the company generated revenues of $42.9 million in the first half of this year. Annualizing the first six months of revenue, the Morning Coffee Best Guess is that the company is being priced at almost 13x historical revenues. How's that for investor sentiment on market growth?
2300 is a lot of times! That's 230,000%. Now that's a growth rate!