A123 Systems (AONE): What Happened to that ‘Hot IPO?’

Touted by Cramer and other mainstream media pundits as the “Hottest IPO of the Year,” A123 systems made its public debut in September 2009. We, at ChartingStocks didn’t share in the hyped up optimism and suggested that our readers steer clear from this issue for reasons you can read about here.

GE subsidiary CNBC, tried awful hard to prop up A123 Systems, which was also owned by GE. The stock began to collapse once the 30-day short sale restriction was lifted (IPO’s can’t be sold short during the first 30 trading days). The stock plunged from $28 to $8.10 last week (As the S&P 500 rose 8% in that same time frame). The stock currently trades roughly 30% below the initial offering price and appears to be rising from oversold conditions. If I were interested in the A123 story, which I’m not, I’d consider entering at this level rather than being suckered into media hype. Bottom Line: Be cautious of “Hot IPO’s.”