Speculation from a South Korean electric vehicle publication that General Motors (GM) was considering a shift to cylindrical batteries caused weakness on Friday in the shares of Aspen Aerogels (ASPN), Craig-Hallum analyst Eric Stine tells investors in a research note. The analyst sees this as a “classic case of investors acting first and then asking questions later” with the thought that this could potentially put Aspen’s opportunity with GM and its growth aspirations at risk. Investor confusion around these rumors provide a “great buying opportunity” in Aspen Aerogels and an appealing entry point ahead of the company’s “substantial growth ramp,” Craig-Hallum confirms. The firm views the report as unfounded and misplaced, thinks investors “should look at the long list of reasons why this makes no sense.” It is unlikely that GM would walk away from the billions of dollars it has already spent on three pouch battery plants and the substantial investment made to date on its Ultium platform, the firm says. It reiterates a Buy rating on Aspen Aerogels with a $32 price target.
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