Elon Musk's solar energy biz scraps IPO liftoff at last minute Elon Musk's clean tech venture, SolarCity, has delayed its initial public offering at the last minute, putting the shares, which had been due to start trading today, on hold. The solar energy firm is struggling to price its stock sale amid troubles in the sector, sources told Reuters and the New York Times. According to an …
"The delay bolsters my feeling that these people are serious about putting a proper value on the stocks, not just hype them up and rake in the profit."
Then you're daft. The whole point of an IPO is to raise as much money for the company (and particularly it's advisers) as possible. If you're right, and I'm wrong, then lead underwriters Goldman, Credit Suisse, and Merrill have cut the price as an act of charity to the sort of people who buy into IPO's like this (Facebook, anyone?).
If I'm right (and you're wrong) then they simply couldn't shift the stock at the mooted $15 to the major institutions, and had to back down on both price and volume.
So, your call. Wall Street: publicly spirited eco do-gooders, or rapacious thieves?
An IPO is SUPPOSED to make as much as possible for the company to use as capital, for development, starting production lines, increasing production, sort term day-to-day operations (if this contenues for any length of time, that's bad).
In either case, I think you are right, they couldn't move at 15USD/share. Personally I would not buy into this at 5USD/share because I am not convenced they will ever make this profitable (although I would rather like to be proven wrong).
Having Elon Musk on board must be a help for the company as well - there's an immediate and obvious tie in with wealthy folk buying Tesla EVs who may have properties with large roofs that can accommodate a decent sized solar panel installation with which to power the vehicle. Buy a Tesla - get a free SolarCity roof top power station thrown in to run it.
It does show the subsidies are a double edged sword though, especially if their withdrawal isn't planned and advertised well in advance (as the UK solar industry discovered last winter). And that doesn't just apply to renewables like solar and wind: the tax break subsidies for gas fracking announced by George Osborne may well stuff up that fledging industry as well if the multinationals get hooked on them and then suddenly have them reduced/removed.
Telsa was offering free charging because the government was buying their solar feed-in at 5x the rate that Telsa was buying power back to charge the cars.
At some point though people in Chicago are going to wonder why pensioners are freezing, because they can't afford heating, in order to give people in California free top-ups for their $100K sports cars.
"can accommodate a decent sized solar panel installation with which to power the vehicle. "
Only if your roof is the size of a football field, and your car spends every daylight hour at home charging...
People aren't investing in this because they know it only works with massive government subsidies, and the government is broke - only a matter of time...
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