Clean Tech IPO IncomingSolarCity, the largest solar panel installer in the U.S., has filed papers with the SEC for an almost $200 million initial public offering (IPO). The amount of the IPO could still change, but it will probably be in the 200m ballpark. SolarCity plans to list on the Nasdaq exchange under the symbol SCTY.
Bloomberg writes: "SolarCity reported total revenue of $59.6 million in 2011, an 84 percent increase from a year earlier, and has posted at least five consecutive annual losses, the filing shows. The IPO may value SolarCity at more than $1.5 billion, a person with knowledge of the matter said earlier this year. Musk, also chairman of Tesla Motors Inc. (TSLA), the startup electric-carmaker that received $465 million in U.S. Energy Department loans, holds almost one-third of SolarCity’s shares, according to the filing. The company sells power to customers in 14 states, including Wal-Mart Stores Inc. (WMT) and Intel Corp., and plans to expand internationally, the filing shows."
The losses aren't necessarily a red flag. Fast-growing companies often re-invest everything they earn and more into the company to expand. The real question is: Once they mature and reach the size that they want, will they then be able to make money? That remains to be seen, but they certainly have an interesting business model.
Bad for Some, Good for Others...The current pricing softness in the solar industry is hurting the bottom line of solar panels makers, but SolarCity is an installer, not a manufacturer. They buy lots and lots of panels, so lower prices actually help them increase their profit margins. That's an interesting dynamic that should last for a while longer, as the oversupply in the market should last a while longer.