SolarCity shares soar 47 percent in market debut
By Olivia Oran and Nichola Groom
(Reuters) - Shares of SolarCity Corp (SCTY.O: Quote) jumped nearly 50 percent during their market debut on Thursday, a day after the company was forced to slash its IPO price to attract investors skittish about putting money into the volatile clean technology industry.
The solar panel installer's stock rose 47.4 percent to close at $11.79. It hit a session high of $12.70, just 30 cents shy of the low end of the company's original proposed pricing range.
The San Mateo, California-based company backed by technology entrepreneur Elon Musk sold 11.5 million shares at $8, raising $92 million. It initially had planned to sell 10.1 million shares between $13 and $15 per share.
SolarCity, the top U.S. installer of residential solar systems is among Silicon Valley's hottest clean technology companies. Its IPO has been widely anticipated in venture capital and solar energy circles.
The company has grown rapidly, largely because it allows customers to lease solar panels by paying a monthly fee, avoiding the hefty costs of an outright purchase.
Concern that the company's original $1 billion valuation was too rich initially turned off potential investors, many of whom have been burned by the poor performance of cleantech stocks broadly and solar manufacturing stocks in particular, SolarCity Chief Executive Lyndon Rive said in an interview.
"We don't manufacture equipment, we sell cheaper clean energy. I thought that that would be enough to convince investors to look at the fundamentals of the business," Rive said, adding that investors "just cannot take any risk."
SolarCity's valuation now stands at around $845.3 million. At the bottom end of its first expected pricing range, SolarCity would have had a valuation of about $930 million. SolarCity is now the second-most valuable U.S.-listed solar company behind panel manufacturer and project developer First Solar Inc FSLR.O, which has a market capitalization of $2.6 billion. Continued...