Trading under the stock symbol SCTY as of this morning, "clean
energy" provider SolarCity appears to be experiencing positive
activity in the market so far, as its stock has surged nearly 30
percent over its $8-a-share initial public offering price. The
company had delayed its IPO by a day because it struggled to
decide on a price for its 11.5 million offered shares. Upon
reaching a decision, SolarCity shares, which opened at $9.25, now
trades at $11.84 - its highest for the day so far was $12.70.
With a market cap of around $600 million reported by CNN,
SolarCity is a company that installs solar panels for its
clients, spanning from 14 states, through 31 operations centers
(solarcity.com). Its business model is set apart from other solar
companies, being that it is the only company that finances its
own services of installing rooftop solar systems in exchange for
long-term monthly payments from its customers, without involving
third parties. The company, whose chairman is Tesla Motors (
TSLA
)'s Elon Musk, also provides additional services including energy
efficiency evaluations, electric vehicle charging services,
energy monitoring software and battery storage solutions.
SolarCity is the second solar company to initiate a public
offering this year. Competitor, Enphase Energy Inc. (
ENPH
), whose IPO was $6.00 per share, went public in April. Since
then, Enphase has deflated down to $2.96 in trade price, and has
diminished in market value by 57.18 percent year to date.
Critics speculate whether SolarCity will result in the same fate,
regardless of the recent boom in the U.S. solar market. According
to a report by the Solar Energy Industries Association, there has
been a 44 percent increase in photo-voltaic solar panel
installations in residences across the nation.
Several investing Gurus have also dabbled in solar stocks this
year, including
Jim Simons
, who owns 3 million shares of Suntech Power Holdings (
STP
),
Brian Rogers
, who owns 1.5 million shares of First Solar Inc. (
FSLR
) and Manning & Napier Advisors who owns about 357,000 shares
of Yingli Green Energy Holding Company Ltd. (
YGE
).
In Third Point LLC's
first quarter investor letter
, the hedge fund, which was founded by Guru
Daniel Loeb
, commented on Enphase stating:
"EnPhase has grown rapidly and is the number one inverter
vendor for solar installations in California and a close second
for installations in all of North America. The company is
expanding into Canada and Europe and reported revenues for 2011
were ~$150M. In the face of solar industry headwinds, EnPhase has
consistently increased gross margins and revenues yearly. They
are the only company shipping volumes of Micro?Inverters and have
been able to grow through share gains based on superior value
offered to their customers. For these reasons, we continue to own
EnPhase and see a bright future ahead."
Solar module manufacturer, First Solar was actually dubbed the
worst-performing stock in the S&P in 2011, after it fell 86
percent. However, Greenlight Capitals's David Einhorn shorted the
stock the same year, in which he came out ironically victorious,
according to Greenlights's 2011 Letter to Investors.
Suntech, First Solar and Enphase stocks are down at least 2
percent for this afternoon's trading. Yingli Green Energy is up
1.36 percent, along with another solar module manufacturer, Trina
Solar Ltd. (
TSL
), which is up 4.79 percent.
All of the mentioned competing companies have lost significant
market value year-to-date: Suntech has fallen by 56 percent,
First Solar has gone down 7 percent, Enphase has fallen 60
percent, Yingli has fallen 42 percent and Trina has fallen 41
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