GT Solar Picks the Wrong Day To Go Public

Not a good debut today for GT Solar (SOLR), a Merrimack, N.H. company that makes equipment used to manufacture solar wafers, modules and systems. The company went public today at $16.50 a share, selling 30.3M shares, for total proceeds of about $500 million. None of that goes to the company; all of the shares are being sold by GT Solar Holdings, a company owned by the venture firms GFI Energy Venture and Oaktree Capital Management. After the offering, according to the prospectus, the company has 142.4 million shares, for a market cap at the IPO price of $2.35 billion. GT Solar Holdings still owns 74% of the company after the offering.

Anyway, the point is, no matter how hot you think the solar industry is - and maybe you think it is a little less hot this morning after the ugly performance today by MEMC Electronic Materials (WFR) - you probably don’t want to go public on a day when the Dow is down 265 points. That is especially true given the lack of urgency here; the company itself is clearly not dependent on this deal happening immediately since it gets no cash from the offering. Ergo, GT Solar in one fell swoop has reinforced the notion that the market is not that interested in IPOs, and set back the prospects for new IPOs in the solar sector, an industry where venture funds have been investing billions of dollars.

SOLR is now down $1.74, or 10.6%, to $14.76. Day one, and already the investors are unhappy.

In case you are wondering who to blame: Credit Suisse (CS)and UBS (UBS) lead the offering, with Banc of America Securities, Deutsche Bank, Piper Jaffray and Thomas Weisel as co-managers.

Comments

[22thoroughbred:]

Do you think the underwriters really care if there is an appetite for solar stocks, not, there is an appetite for them to get paid 6% og $500mm or $30mm, it went down, oh well. As we in the business say, the firm made money, the broker made money, the client lost money, 2 out of 3 isn't bad.

2008 Jul 24 07:23 PM

[gebby:]

solar stocks might start to go up if writers for barrons like eric savitz start writing useful positive articles for a change. instrad they just campaign to undermine these companies because they threaten other well established industries. freedom of the press is for those that can afford it.

2008 Jul 25 09:38 AM

[Zenfar:]

I don't mind if the article is positive or negative, but I would like some more facts about the company, are they profitable? Who would the compete with and what is their position in the solar food chain? It would be nice if there was more content in the reporting. I did find it interesting that the company isn't getting any of the cash from the IPO, but perhaps there is a good reason for this.

2008 Jul 25 09:58 AM

[22thoroughbred:]

It's not a writers responsibility to be a cheerleader, if you want pom-poms watch Maria Bartaromo on CNBC, all she needs is pom-poms and tennis shoes, she's a cheerleader, I just want information and honesty, let me decide what's good and bad

2008 Jul 25 11:04 AM

[bowater:]

oil sands, the answer.
there is a company in Minnesota that can transport the oil sands slurry without damaging the pipe.


irproducts.com

2008 Jul 25 11:16 AM

[kevintx:]

This IPO is remarkably broken, with sort of disorderly selling on Friday, its second day of trading. It fell to 9.3 or 44% below the IPO price before rebounding. The trigger was a major client LDK ordering from a competitor, compounding worsening sentiment in the solar sector and the recent poor general market. That's pretty panicky for this news, whoever was selling. The financial entities getting all the IPO might make for aggressive selling?

2008 Jul 26 07:17 AM

[10Q Detective:]

Excess in production capacity for polysilicon could adversely affect demand for the equipment for sale by vendors like GT Solar, forcing them to cut fabrication equipment margins to stay competitive.

industry.bnet.com/ener.../

2008 Aug 01 05:04 PM