Solar panel installer and financier SolarCity started trading at $9.25 on Thursday morning, and rose up over 40 percent at one point to $11.20 by 12:15 (EST). The company priced its initial IPO at $8 per share, and had reduced the price in recent days from an estimated range of $13 to $15 per share.
The early rise is good news for SolarCity’s investors. The investors, including co-founder Elon Musk, Draper Fisher Jurvetson and DBL Investors, agreed to buy up about a third of the float the day before trading. If the stock can stay up substantially they’ll make a nice profit off of the shares they bought at $8 per share. However, when a small amount of insiders own a substantial amount of the stock, it can get tricky if they want to cash out after the lock-out period (typically 6 months).
SolarCity raised $92 million in the offering, and had a valuation of $592 million at the $8 per share price. That’s down from an over billion dollar valuation, and a planned raise of $141 million. Wall Street has seemed a little skittish of solar and clean energy stocks throughout 2012.
Given the interest in SolarCity’s stock in morning trading, perhaps that sentiment is turning a corner. An $11 per share price is a closer valuation to what the company and its investors wanted originally. SolarCity installs and finances solar panels on rooftops, which is very different from a manufacturer making solar cells and modules.