Shares of SolarCity Pop After IPO

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of SolarCity (NASDAQ: SCTY  )  jumped 10% at the open today after soaring 47% from their IPO price yesterday.

So what: The bounce this morning was short-lived and shares are now only up about 1%. The good news is that yesterday's gains haven't evaporated. 

SolarCity finally reached the market at $8 per share after a touch and go IPO process. The company initially thought it could command $13-$15 per share in a $151 million IPO, but the number was brought down to $8 in the last 48 hours before the IPO.

Now what: SolarCity has a lot of questions ahead, as I pointed out before the IPO, so judging the performance of the last two days isn't wise. The company has an interesting opportunity in a growing U.S. solar market but it also may have to pay investors and the Treasury Department back for overstating the value of its solar installations. That said, it will be an interesting company to watch in the coming years. For now, there are too many questions for me to buy at the current price but if the IPO bubble pops over the next few months it may be worth revisiting. 

Interested in more info on SolarCity? Add it to your watchlist by clicking here.

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  • Report this Comment On December 14, 2012, at 9:58 PM, gsned57 wrote:

    "Real Good Solar" (RSOL) has essentially the same business model and has been buying up local solar installers for the last few years to build out their base. They don't have the Elon Musk Name but 3 days ago they were trading at 0.60 cents and are now at a dollar thanks in large part to the visibility they are getting as a solar city competitor. If these two companies can truly install solar on your roof for no money down then lock you in at an electric rate at or lower than what you currently pay the sky is the limit! There are certainly risks as with any company but who wouldn't want to stop their energy bill from growing every year. I went with the cheaper RSOL but after watching what all of the solar stocks have done in the last 2 years I'd rather start at 0.60 cents than $12 for a company at 1/5th the market cap. I'd welcome any thoughts or analysis of RSOL vs SCTY.

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