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SolarCity IPO Set for December 12

Could Stand Out as Panel Installer

Written by Swagato Chakravorty
Posted November 29, 2012 at 5:03PM

SolarCity Corp., set to go public on Wednesday, December 12, projects its IPO of 10.07 million shares will see prices between $13-$15 per share.

If reality meets the upper end of expectations, that means the IPO could raise up to $151 million, giving SolarCity a valuation in excess of $1 billion, Reuters reports.

SolarCity is a U.S. installer of both residential and commercial solar systems. A successful IPO would make it second only to First Solar Inc. (NASDAQ: FSLR).

On the other hand, it would also make SolarCity an anomaly among publicly-traded solar firms since the majority of the sector is panel manufacturers.

Those companies have been hit hard by worldwide overproduction of solar panels—a problem worsened by artificially depressed costs of Chinese-made panels—which has caused panel prices to crash.

SolarCity benefits both from lower prices of its offered panels and its business model, which lets customers lease panels on a monthly basis (thereby resolving the problem of a large initial cost of purchase).

From Reuters:

"U.S. investors for a long time have wanted to have a way to get leverage to the domestic solar market without having exposure to manufacturing," said Raymond James analyst Pavel Molchanov. "SolarCity is not a manufacturer of any kind and that makes it a one-of-a-kind story in the public market today."

SolarCity hopes to begin trading on the Nasdaq under the ticker “SCTY.” After the offering, the company expects to have 71.71 million shares outstanding.

SolarCity is selling 10 million shares, and selling shareholders will also offer 65,012 shares in the offering.

The company has an interesting backstory: Elon Musk, Tesla Motors Inc.’s (NASDAQ: TSLA)founder and CEO, is also SolarCity’s chairman and first cousin to SolarCity co-founders Lyndon and Peter Rive. SolarCity has received funding on occasion from Google (NASDAQ: GOOG) and U.S. Bancorp (NYSE: USB) for various projects.

This IPO is underwritten in part by Goldman Sachs, Credit Suisse, and BofA Merrill Lynch.


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