SunPower Shines

The sun is shining brightly on the stock of solar cell manufacturer SunPower (Nasdaq: SPWR  ) . The company's hot initial public offering (IPO), originally priced between $12 and $14 a stub, achieved a final IPO price of $18 a share.

Demand for the stock spilled right onto Wall Street, where stock opened at $28 a share. That's 55.6% higher than the IPO price and 100% above the high end of the initial pricing. Ultimately, the stock closed at $25.30, for a more humble 40.5% return. Not bad for a day's work.

SunPower now sports a $1.5 billion market cap, at least for the next 18 hours. What are investors getting for their money? There are nine-month revenues of $49.4 million that produced a loss of $15.2 million. There's also $126.8 million in proceeds from the stock's IPO.

It blows my mind that on the same day investors traded SunPower to the moon, they've sent the stock's parent company, Cypress Semiconductor (NYSE: CY  ) , down 1%. After the IPO, Cypress still owns 52 million shares and 98% of the voting rights at SunPower. At $26 a share, Cypress' stock is worth $1.35 billion; compare that to its entire market cap of $2.1 billion.

By spinning off SunPower, Cypress has unloaded a money-losing operation in need of cash. This should help Cypress with its long-term profitability, and all the IPO cash will certainly help SunPower. The newly separate company plans to triple its manufacturing capacity (using $45 million to $55 million of its IPO cash hoard), and it should have plenty of greenbacks left over to lower manufacturing costs and fund product research. The market sees all this and still sends Cypress down? Investors must have been blinded by staring at the sun.

Turning back to SunPower and its out-of-sight reception, investors should be cautious. This year has brought plenty of examples of IPOs that opened hot and fizzled in a matter of weeks. Investment bankers are paid a lot of cash to price IPOs at reasonable levels, which makes it unlikely that they missed SunPower's true valuation by such a wide margin. In fact, with competition in solar from giants like General Electric (NYSE: GE  ) , BP (NYSE: BP  ) , and Royal Dutch Shell (NYSE: RD  ) , along with Lilliputians such as Evergreen Solar (Nasdaq: ESLR  ) , it should only be a matter of time before this moon shot returns to the more terrestrial levels of its IPO pricing.

In my opinion, Cypress Semiconductor is the big winner here. Even at the IPO price, its stake in SunPower is now valued at a dazzling $936 million.

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Fool contributor W.D. Crotty does not own any shares in the companies mentioned. Click here to see The Motley Fool's disclosure policy.