Aspen Aerogels, a Northborough-based company specializing in aerogel insulation, has had their stock price rebound. With products used throughout the energy sector for everything from heat buffering to cryogenic insulation, Aspen Aerogels put out an initial public offering (IPO) on June 13th, 2014. Their initial opening price was $11.00 on 6.67 million shares released to the public. Their IPO, managed by Barclays, J.P. Morgan Chase and Citigroup, opened the trading day at $11.00 and dipped lower, in part because of the Friday announcement day, and in part due to an offering near the end of a calendar quarter, when profit taking tends to sit in the minds of investors.
After an initial dip to $10.53 per share, and trading bounded between $10.25 and $10.60 per share for the last week, Aspen Aerogels’ stock is on the rise – closing 7% above their IPO price at the beginning of this week, with trading volume roughly doubling over the previous week.
Aerogels, commonly called “solid smoke,” made up of silica structures riddled with nanopores, maintaining 97% of their volume as trapped air. This makes aerogels a near-ideal insulation material. Aspen’s proprietary technologies include processes that reduce manufacturing costs and increase the durability of the materials. Aspen’s development strategy has targeted energy sector companies, who have immediate, and extreme, needs for insulation, and ones where weight and efficiency are paramount.
Typical investment strategy with Aspen Aerogels is a buy-and-hold. As an industrial-facing supplier, they do not currently have a direct-to-consumer product. Increasing demand from the energy sector has caused them to double production at their East Providence, R.I. facility, and this IPO is targeted at further expanding their production capacity, with some funding aimed at maintaining R&D partnerships with companies like BASF Construction Chemicals, to create aerogel-based insulation for commercial construction, including products that can be retrofitted into existing structures.
