Setback for SolarCity IPO | KCET
Setback for SolarCity IPO
Looks like the solar market is even more tenuous than some observers had thought: Photovoltaic installer Solar City has shifted gears at the eleventh hour before its planned Initial Public Offering, drastically cutting its offered share price to $8 from last week's $130-$15. Instead of the $201 million the San Mateo-based solar installer had hoped for, the company now plans to raise $92 million as it becomes a public company Thursday.
Board Chairman and Space-X founder Elon Musk, according to the firm's S-1 amendment, plans to buy $15 million worth of the company's stock, which some observers interpret as something less than a vote of confidence in the IPO's success. Investors working with Draper Fisher Jurvetson and DBL Equity Fund will be buying an additional 1,800,000 shares.
More optimistic observers had hoped that SolarCity, as an installer of solar modules rather than a manufacturer, would be somewhat insulated from the economic sickness at the heart of the solar industry in recent years. While oversupply of solar panels has devastated the manufacturing sector, companies such as SolarCity that rely for their profits on installing the modules have been benefiting from those lower material prices.
Still, as Greentech Media's Eric Wesoff puts it, that wasn't enough to persuade potential investors, and SolarCity failed to secure buyers for all the stock it planned to sell at the higher price:
Like BrightSource Energy, another solar firm, albeit in vastly different sectors -- institutional investors were having none of the high valuations anticipated by these VC-funded startups. If you're selling electrons like SolarCity or BrightSource Energy, then you get valued like a conventional power generator, not like a consumer gadget.
It didn't help that SolarCity had to announce today that it is being audited by the Internal Revenue Service over the company's assessment of fair market value of its systems, which the company declares to claim solar incentive cash grants the government offers as a subsidy for new solar installations. If the IRS assesses those systems as less valuable than SolarCity has claimed, the company may have to shell out a significant amount of cash. Not a great climate for an IPO.
SolarCity is one of the nation's largest installers of rooftop solar panels and a pioneer in the third-party solar leasing business. The company has installed photovoltaic modules on tens of thousands of properties nationwide.
For ongoing environmental coverage in March 2017 and afterward, please visit our show Earth Focus, or browse Redefine for historic material.
KCET's award-winning environment news project Redefine ran from July 2012 through February 2017.
Mole, Micheladas and More: What to Eat and Drink While Watching the First Episode of ‘In Concert at the Hollywood Bowl’
It’s not a Hollywood Bowl concert without food. Here’s a guide to eating and drinking your way through the bounty of Mexican food in Southern California to complement the first episode of “In Concert at the Hollywood Bowl.”
Spurred by the cancellation of the Hollywood Bowl's summer concert season, the LA Phil, KCET and PBS SoCal have partnered to offer Los Angeles a different communal experience of music through a new television series “In Concert at the Hollywood Bowl.”
USC faculty pushes for independent investigation into allegations of shadow and dirt files on colleagues
USC faculty members are pushing their leadership to demand an independent investigation into allegations that university administrators maintained “shadow files” on employees.
Saying he has zero tolerance toward alleged deputy cliques, most notably in the East Los Angeles station, Sheriff Alex Villanueva today announced a crackdown potentially involving the suspension or firing of more than two dozen deputies.
- 1 of 335
- next ›