After a tortured pricing process, solar PV installer SolarCity Corp. (NASDAQ: SCTY) completed its IPO today, with 11.5 million shares offered at $8 a share. The IPO price was well below the initial range of $13 to $15.
The good news is that the share price has rocketed up to more than $11 a share in mid-day trading. Yesterday we noted some of the problems the company faced, but investors apparently put those aside today.
The company installs solar PV systems on residential and commercial buildings, financing the cost of the system itself and then selling the electricity back to the owners at an agreed price under a long-term power purchase agreement. The scheme has been quite successful, resulting in significant business since SolarCity began implementing it. The catch, of course, is that the payoff comes in a longer term than many investors are willing to wait for.
At recent trading levels, the company’s valuation is over $750 million.
Shares of SolarCity are trading at $11.21, up more than 40%, shortly after noon today.