Yesterday, SolarCity delayed its IPO because of resistance from investors. Instead, the deal is expected to price tonight. The lead underwriters include Goldman Sachs (NYSE:GS), Credit Suisse (NYSE:CS) and Bank of America Merrill Lynch (NYSE:BAC).
According to a report in Reuters, SolarCity plans to issue 11.5 million shares at $8 a piece. This means the valuation will be cut nearly in half to $585 million.
SolarCity is a top provider of installation services for solar panels for homes and businesses. And growth has been strong. For the first nine months of 2012, revenues soared by 167% to $103.4 million. Still, there was a net loss of $77.9 million.
SolarCity is the mastermind of Elon Musk, who co-founded breakout companies like eBay‘s (NASDAQ:EBAY) PayPal, Tesla (NASDAQ:TSLA) and SpaceX. His involvement apparently wasn’t enough to get investors excited, though, despite the fact that he said he would invest $15 million in the offering.
Of course, it’s important to remember that the solar industry has been particularly weak over the years. It does not help that energy prices have been declining lately and that there will likely be cutbacks in subsidies, especially in the U.S. and Europe.
As a result, the IPOs in the solar industry have been dismal. Just take a look at Enphase Energy (NASDAQ:ENPH), which makes next-generation solar inverters. In late March, the company pulled off its IPO at $6 a share and the stock has since plunged to $3.
Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders.” Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.
A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.
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