A123 Systems Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of A123 Systems (Nasdaq: AONE  ) have popped by as much as 18% today on news that the company will be supplying batteries for General Motors (NYSE: GM  ) .

So what: GM announced an all-electric version of the Chevrolet Spark that will debut in 2013 and be rolled out in a similar fashion to the Chevy Volt. The automaker confirmed that A123 Systems would be providing the battery for the Spark.

Now what: The Spark is a small car and would compete directly with the all-electric Nissan (OTC: NSANY) Leaf and upcoming Ford (NYSE: F  ) Focus Electric. The Spark also represents a big push into all-electric for GM, an initiative that the company has talked up. It will use advanced nanophosphate lithium-ion battery packs supplied by A123. It's a solid win, but I wouldn't jump in too hastily on the news as this stock still has some hurdles to clear.

Interested in more info on A123 Systems? Add it to your watchlist by clicking here.

Fool contributor Evan Niu owns shares of Ford, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Ford. Motley Fool newsletter services have recommended buying shares of Ford and General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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