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SolarCity’s expected IPO slips off schedule

Solar installer SolarCity’s planned IPO appears to be delayed, though its unclear if its just a temporary setback or a longer term postponement according to reports in Reuters and the San Jose Mercury News. The venture-backed startup was planning to price its shares on Tuesday night and make its debut on Wednesday morning.

That has yet to happen. SolarCity didn’t respond to requests for comment.

While it’s unclear why SolarCity delayed pricing and going public tomorrow, it could be because it wasn’t able to price its shares in the expected range of $13 to $15 that it wanted. The Mercury reports that SolarCity is “likely to reduce the price of shares below its original range.”

A report in MarketWatch this afternoon said that SolarCity was “facing headwinds” as it prepared to price in its targeted range. Discussions are around $10 per share among underwriters, says MarketWatch. An underwriter quoted in a DowJones VentureWire report says that SolarCity could try to price its shares on Wednesday.

If the delay is long, and the price per share is significantly lower than its range, the news would be a bummer for solar and cleantech stock watchers. The long planned IPO is seen as a bellwether for how Wall Street feels about clean energy and cleantech prospects.

3 Responses to “SolarCity’s expected IPO slips off schedule”

  1. Wallstreeter NYC

    FYI Analysis of SolarCity IPO’s Strengths and Risks from pre-IPO research firm PrivCo.

    Despite many strengths – including 80%+ revenue growth and the Elon Musk halo effect – the company $SCTY is just so capital intensive. More dilutive capital would need to be raised post-IPO:

    IPO Strengths:
    * SolarCity’s revenue is growing at strong pace, despite being in a tough sector where many peers have gone under
    * SolarCity installs, leases and retails solar panels, but doesn’t make them – current pricing softness in industry actually helps SolarCity increase margins
    * Backers of SolarCity include Elon Musk (31.9% share)
    * 30% federal tax credit cash grant allowed investors to take credit in form of cash
    SolarCity is 1st clean energy IPO since Enphase (March 2012)

    IPO Risks:
    * Alternative energy market has a terrible track record, and is not favored by investors (clean tech IPOs withdrawn or postponed – due to lack of investor interest: BrightSource Energy Inc., Enerkem, Luca Technologies, Elevance Renewable Sciences, Genomatica, Coskata, Fallbrook Technologies, Solyndra, and Smith Electric Vehicles
    * SolarCity has high Cost of Sales (90% of customers lease, so SolarCity shoulders the costs) – need heavy funding to survive
    * SolarCity is currently under investigation by the Treasury Dept. & IRS for fraud relating to cash grants
    * Capital intensive. More dilutive capital would need to be raised post-IPO:

    Full Analysis: