The renowned solar power provider, SolarCity Corp. has collected $92 million in its first public offering. The California based company has sold a total of 11.5 million shares at a price of $8 per share. These sold shares equal to a total stake of 16%. Initially, SolarCity, headed by billionaire Elon Musk, expected to raise 39% more through this first public offering. However, they had to sell the shares at a reduced price. The original planned price was something between $13 and $15 per share. The number of shares to be offered in the public offering was initially expected to 10.1 million, but was increased later considering several factors. The first public offering gives SolarCity a total worth of $585 million.
SolarCity is expected to grow further in future as it recently set up many equipment installations in California which is the biggest solar power market in US. It has more installations than others in this market. However, the US market has pummeled public solar stocks over the years. There is also a pending inquiry done by US Government on SolarCity’s accounting practices and the same is expected to raise the company’s service costs. Hence, the buyers in the IPO commanded for a discount in the share prices and it was accepted by the company. The stock will begin trading right on today. It is listed in the NASDAQ stock market and the symbol used is SCTY.
Till September this year, SolarCity has suffered a total loss worth $95 million. The company is known to charge below-market rates to the consumers for solar electricity, lease the solar panels and install the same into a customer’s property. In its latest regulatory filing, the company has stated that the spending of US on the services related to energy efficiency is expected to increase by 4 times between 2008 and 2020. The spending should reach somewhere near $80 billion. SolarCity has installed their panels in a total of 45000 buildings ranging in 14 different states of US.
A negative factor for the solar company lies in the oversupply of raw materials and equipment. Though the demand for alternative energy is expected to rise with time, the stocks of solar companies have been hit hard because of this. The World Solar Energy Index defining company shares of solar companies decreased by 65% in 2012.