Wunderlich Says A123's (AONE) 'Breakthrough' Technology is All Media Hype; Maintains Sell, $0.50 Target

June 13, 2012 8:11 AM EDT
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Following a jaw-dropping 51-plus percent surge in shares of A123 Systems (Nasdaq: AONE) on Tuesday amid reports of a new "breakthrough" technology, Wunderlich's Theodore O'Neill gave shareholders a sobering smack this morning: there is no new technology.

O'Neill insisted new technologies in the battery sector are "a dime a dozen" and often take years to develop. To that point, the analyst noted A123 will need about $400 million to support current operations for the next 18 months.

O'Neill maintains a Sell rating and $0.50 price target on shares of A123, but said his price target would be a big fat goose egg if the company's factories were excluded from the valuation. O'Neill said A123's factories have "residual scrap value."

Investors in A123 are taking profits Wednesday morning, with the Wunderlich report certainly not helping. A123 shares are down 8 percent to around $1.45 in pre-market action.

To track all the market-moving analyst action on shares of A123, visit our Analyst Ratings page.

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