By Eric Wesoff
After a painful pricing process, SolarCity (NASDAQ:SCTY) is now a public company. The stock is currently trading late in the day at $12.00, up 50 percent. Pricing the deal at $8.00 per share looks smart now, one day in to a very long slog.
CEO Lyndon Rive said in a video interview on Bloomberg TV, "What matters is what the price is in four years, not what the price is today,"
In their first post-IPO interview, Rive and Chairman Elon Musk spoke about SolarCity's stock pricing, the solar market, and weddings.
When asked by Bloomberg TV about the initial IPO price, "Who screwed up here? Something went wrong when you target $13 to $15 and end up with $8[...]Who was pushing for that valuation and didn't get it? Was it you guys or was it your bankers, led by Goldman Sachs?"
Musk said, "Where we arrived at the $13 to $15 was based on valuing the business on fundamentals," adding, "$13 to $15 is actually a deal -- we actually think it's worth more than that."
Rive suggested that people confused SolarCity with solar manufacturing companies. He said "SolarCity has a total different business model than any other solar company out there. The business model is not to sell equipment but is to sell energy -- and we sell energy at a lower cost what you can buy from the utility."
When asked if the company should have postponed the IPO until after the fiscal cliff matter in the new year, Tesla CEO and SolarCity Chairman Elon Musk said, "We debated that at length at the board. In fact It was a close call as to whether we should remain private or go public."
The deciding factor according to Musk and Rive was that it was important for the firm to go public and allow investors the ability to look at the firm's execution and get comfortable with the business model. Musk took the "advice of institutional investors that we respect."
Musk said, "Think of it like a wedding -- you're there, you're at the altar, you're ready to get married. It's not such an easy thing to, sort of -- let's just get married next month."
Rive added, "It starts raining, let's cancel the wedding, and recess it next month."
Rive said that the goal is to be cash-flow positve by the end of 2013.