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Summary:

In the weeks since restrictions lifted on insiders holding the bulk of A123′s stock, some executives have started to cash out. The transactions represent just a trickle of cash compared to the wealth created on paper in the first day of trading.

On paper, the venture capitalists, investors and chief executives with the largest stakes in A123Systems saw the value of their holdings climb into the tens and hundreds of millions of dollars when the lithium-ion battery maker went public last fall. In the two weeks since restrictions lifted on insiders holding more than two thirds (about 70 million shares) of A123′s stock, regulatory filings show a handful of A123 executives have started to cash out — selling more than 106,000 shares for $13.81-$14.66 each (see update below).

Shareholder Shares Sold Average Trade Price
Robert Johnson, Energy Solutions Group VP 50,000 $13.96
Gilbert Riley, CTO 25,000

25,000

$13.91

$14.29

David Vieau, CEO 5,555 $13.86
Mike Rubino, CFO 5,000 $13.81
Evan Sanders, Global Sales VP 1,300 $14.66

These transactions represent just a trickle of cash compared to the more than $9 million that the shares sold by A123′s four co-founders  in the IPO were worth, and compared to the amount of wealth created on paper during Day 1 of trading. A123′s share price surged more than 50 percent during its first day of trading to close at $20.29, after debuting at $13.50.

For the company’s eight largest shareholders — which include including North Bridge Venture Partners, General Electric and Gururaj Deshpande  – that spike meant the value of their holdings grew by nearly $270 million over the course of the day, according to Xconomy.

A123 raised some $200 million or more over the eight years before its blockbuster IPO, and it generated a lot of buzz among investors on the bet that the nascent market for plug-in vehicles would take off, carrying A123 with it. The company has won battery supply contracts for Fisker Automotive’s planned plug-in hybrid Fisker Karma and the upcoming electric Fiat 500. And it has formed a joint venture with Chinese automaker SAIC Motor Corp. to sell battery systems for electric vehicles in China.

But while A123′s revenue has grown in recent years, it has never turned a profit. Revenue and profits aren’t expected to ramp up until after 2012, and the stock has been up and down over the past several months.

Update: According to the latest regulatory filing (posted in the SEC’s online database on Monday), A123 CEO David Vieau has also joined the group of insiders starting to sell stock in the battery maker. With the 5,555 shares sold by Vieau, the number of shares sold by A123 executives since the lock-up period ended now comes to nearly 112,000.

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By Josie Garthwaite

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  1. [...] A123 Insiders Squeeze Trickle of Cash Out of IPO [...]

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  2. I’m surprised they aren’t holding on a little tighter to their stock, it looks set to increase in value quite significantly over the next 12 months.

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  3. What I’m wondering is whether A123 holds some exclusive world wide patents in lithium phosphate iron technology and whether the Chinese are ignoring or bypassing that?

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    1. They do have patents, they were recently in a patent dispute with Hydro-Quebec, which I think was settled. The Chinese will probably try to bypass their patents but A123 keeps innovating http://nanopatentsandinnovations.blogspot.com/2010/02/mit-and-a123-systems-reveal-process-to.html

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