SolarCity’s IPO Leaves the Industry in its Dust
SolarCity Corporation (NASDAQ:SCTY) is the latest addition to the Nasdaq, and it’s off with a bang. Shares hit the market priced at $8 and were bid up as much as 50 percent before closing up 47 percent.
There are two general factors affecting SolarCity’s star IPO-day performance. As with any IPO, one is hype. SolarCity is chaired by Elon Musk, who is widely considered to be a pretty exciting guy because of his involvement in PayPal (NASDAQ:EBAY), Tesla Motors (NASDAQ:TSLA), and SpaceX. A noted entrepreneur and investor, he’s committed $15 million for shares of SolarCity and owns a 31 percent stake in the company.
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The other reason, which is perhaps more important, is that the IPO price of $8 per share is way below the $13 to $15 per share that the company initially tossed around. Even 50 percent gains put the stock around just $12 per share, and gives the company a valuation around $750 million compared to the nearly $1 billion it would have had under the initial pricing.
Reuters notes that SolarCity reported a net loss of $80 million on a revenue of $104.4 million for the nine months ended September 30.
SolarCity’s Place in the Industry
SolarCity’s IPO comes at a particularly interesting moment for the solar industry. Shares of American solar module manufacturer First Solar, Inc. (NASDAQ:FSLR) are on a six-month run, but the global industry is suffering from overcapacity and price collapses…