A123 Systems (NASDAQ:AONE) Gets Delisting Notice from NASDAQ, Stock Hit New Lows

A123 Systems, Inc.(NASDAQ:AONE), a lithium-ion battery manufacturer that receives a backing of $249 million by the US government has recently received a notice from Nasdaq. The notice reveals that the stock price of A123 is too low to keep up with the exchange standards. So, it will be subject to delisted if it does not recover $1 in the next 6 months.

A123 stated in a securities filing on Wednesday that it has time till 19th February to increase its share price back to $1.

The stock closed on Wednesday with the lowest ever 37 cents on the Nasdaq. The stock has fallen more than 90% from its 12-month high in September 2011. This has happened due to the worsening cash position of the company and an expensive battery recall this year.

To meet the standards of Nasdaq, shares of A123 must close at $1 or more for 10 business days in a row.

How Should Investors Trade AONE Now? Find Out Here

This year, A123 was hit by costs tied to recalling defective batteries installed in Karma plug-in hybrid of Fisker Automotive. Demand for batteries has not been as vigorous as per the predictions of A123 in the year 2009 when it had won a technology grant under the administration of Obama.

There could be a number of reasons for which the hundreds of millions of US incentive dollars have failed to impress Wall Street with its pending bailout from Wanxiang Group. Since the deal is not obligatory, either party stands to back out.

A probable reason seems to be the uncertainty that the US and Chinese governments will approve of this. China may embrace it but on the other hand, after pouring so many US dollars into A123 only to have the company become a possession of a Communist opponent may not be difficult for Obama administration to believe but the Congress members may examine the plan.

Shares of AONE slumped 4.20% to $0.363 and made an all time low of $0.35. Shares of the company have lost over 77% so far this year.