Wed, Sep. 2, 10:57 AM
- Following its latest fund, created with "a large financial institution," SolarCity (SCTY +0.7%) has raised funds good for financing over $9B worth of U.S. solar projects.
- SolarCity had $489M in cash, $624M in long-term debt, $796M in convertible debt, $202M in solar bond debt, and $311M in solar asset-backed notes at the end of Q2. The company sold $103.5M worth of solar asset-backed notes in mid-August.
Tue, Aug. 25, 9:19 AM| Tue, Aug. 25, 9:19 AM | 7 Comments
Mon, Aug. 24, 4:15 PM
- Musk bought the shares earlier today at $40.49. The SolarCity (NASDAQ:SCTY) chairman/Tesla and SpaceX CEO now owns 20.8M shares.
- With SolarCity having closed up 7.1% to $43.91 - shares were as high as $48.50 today, and as low as $34.65 - Musk has a decent initial return on his purchase.
- Earlier: SolarCity rises; CEO responds to Chanos
Mon, Aug. 24, 12:46 PM
Mon, Aug. 24, 11:34 AM
- In an epic intraday swing, SolarCity (NASDAQ:SCTY) is up 25% from an early-morning low of $34.65 as tech bargain-hunters/short-coverers emerged. 4.76M shares have already been traded, topping a 3-month daily average of 2.45M.
- CEO Lyndon Rive has responded to Jim Chanos' bearish Friday remarks. Regarding Chanos' assertion that SolarCity is a subprime finance company at heart, Rive notes the average FICO credit score for SolarCity customers is 740, well above the 640 level considered the threshold for subprime lending. "[Chanos is] wrong. He knows this. Our FICO score is public when we do securitizations ... He's intentionally saying this to add more pressure to the stock so he can make money."
- Rive also insists SolarCity has been offering cheaper electricity prices than utilities regardless of specific contract terms - Chanos argued many SolarCity clients are stuck with "relatively uneconomic" long-term electricity contracts, given solar panel prices have continued declining.
- Update: Goldman has also come to SolarCity's defense, arguing financing/cost of capital worries that have weighed on shares are unjustified. The firm notes SolarCity successfully sold solar asset-backed securities 11 days ago, and expects more such deals.
- Update 2 (12:36PM ET): SolarCity is now up 18.3%.
Mon, Aug. 24, 10:00 AM
- Among the biggest tech decliners as U.S. stocks tumble/see panic selling amid a global plunge in equities triggered by China/macro fears: SolarCity (SCTY -8.4%), Ambarella (AMBA -8.6%), SolarEdge (SEDG -7.9%), Fitbit (FIT -9.7%), Canadian Solar (CSIQ -10.2%), 21Vianet (VNET -15.7%), Yingli (YGE -14.4%), VirnetX (VHC -11.3%), and Digital Ally (DGLY -19.3%).
- Also off sharply: Rapid7 (RPD -7.5%), Shopify (SHOP -9.1%), Alliance Fiber (AFOP -12%), SuperCom (SPCB -10%), Luxoft (LXFT -7.3%), Box (BOX -14.7%), and Castlight (CSLT -13.8%).
- The Nasdaq has pared its opening-bell losses a bit. It's now down 4.6%, after starting off down 7.5%.
- See also: Premarket decliners, Chinese tech decliners, large-cap tech decliners
- Update (10:35AM ET): SolarEdge is now up 1.6%. Various other names have pared their losses some, but remain sharply lower.
- Update 2 (10:42AM ET): Add SolarCity to the ranks of rebounding stocks: Shares are now up 4.7%.
- Update 3 (12:29PM ET): The Nasdaq is now down just 0.3%. Ambarella, Fitbit, Rapid7, and Canadian Solar have also turned positive.
Fri, Aug. 21, 12:34 PM
- "It's worse than you think," says longtime China bear Jim Chanos, having a day on CNBC. "Whatever you might think, it's worse."
- "People are beginning to realize the Chinese government is not omnipotent and omniscient ... like many of us, sometimes they don't have a clue."
- Chanos is short Solar City (SCTY -8.9%), saying it's really a subprime finance company, burning a lot of cash, and with negative EBITDA ... "this environment ... scary."
- He remains short some of the bigger names in the energy exploration and production space - DVN, MRO, OXY, APC.
- I don't like Shell (RDS.A -1.8%) or Chevron (CVX -1.5%), he says, and believes neither Chevron's dividend nor its buyback are safe.
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Wed, Aug. 19, 1:31 PM
- Solar stocks are underperforming (TAN -4%) as both oil and energy stocks post big losses following an unexpected rise in crude inventories, and Canadian Solar (CSIQ -20%) tumbles in the wake of a Q2 beat and light Q3 guidance. The Nasdaq is down 0.7%, and the S&P 0.8%.
- Major decliners include David Einhorn/Stephen Mandel favorite SunEdison (SUNE -7.2%), which has nosedived since posting Q2 numbers on Aug. 6, and is a day removed from pricing a $650M convertible stock offering. Also selling off: Inverter/power optimizer maker SolarEdge (SEDG -9.6%), which tumbled last week in spite of an FQ4 beat and strong FQ1 guidance, and China's Trina (TSL -7.8%), which rose slightly yesterday following a Q2 beat and full-year guidance hike.
- Other casualties include prominent U.S. names First Solar (FSLR -4.7%) and SolarCity (SCTY -3.7%), Chinese plays JinkoSolar (JKS -7.9%) and JA Solar (JASO -3.5%), and SunEdison YieldCos TerraForm Power (TERP -3.2%) and TerraForm Global (GLBL -3.6%).
- Roth's Philip Shen is defending both Canadian and solar YieldCos. "Although yieldcos are no longer in vogue—for now —we fundamentally believe the quality of solar asset cash flows are high and that there is tremendous amount of growth ahead ... [Canadian's] management indicated that its yieldco launch remains on track for a YE'15 or early 2016 launch, and the confidential filing could occur soon ... Hypothetically, if CSIQ were not successful in launching its yieldco, the company would still be able to recycle its capital by selling its assets. Management believes this could drive $1bn of revenue in 2015, and we estimate this could represent ~$2.50 of EPS. "
- Canaccord's Jonathan Dorsheimer: "We continue to believe that Canadian Solar's module business will experience a tightening supply/demand during this bullish end-of-year adoption cycle, which should benefit CSIQ's core operations. Although recent YieldCo and solar volatility have had dramatic valuation impacts, we believe the fundamental PV growth story is still intact."
Wed, Aug. 12, 12:01 PM
- Solar stocks are among the larger decliners as equities sell off against a backdrop of Chinese macro fears (heightened by the PBOC's decision to devalue the yuan), lower energy/commodity prices, and a general flight to safety. The Guggenheim Solar ETF (TAN -2.8%) has made fresh 52-week lows, and is now down 36% from an April peak of $50.00.
- Chinese and non-Chinese names are getting hit alike. Major decliners include SolarCity (SCTY -3.9%), Canadian Solar (CSIQ -5.6%), Enphase (ENPH -8.6%), JinkoSolar (JKS -6.8%), Yingli (YGE -4.8%), China Sunergy (CSUN -4.9%), Sky Solar (SKYS -4.3%), and SunEdison's TerraForm Global (GLBL -7.1%) YieldCo.
- Vivint Solar (VSLR -8.7%) is tumbling after posting mixed Q2 results (revenue beat, EPS missed). Installations rose 78% Y/Y to 66MW (in-line with guidance of 63MW-67MW), and bookings grew 40% to 73MW. In a sign investors have concerns SunEdison's (SUNE +1.5%) pending acquisition of Vivint won't close (or at least under its current terms), Vivint trades at a 22% discount to SunEdison's buyout price, even after factoring a lower stock payout to account for SunEdison's recent plunge.
- Speaking of which, Deutsche's Vishal Shah has launched a spirited defense of SunEdison today, arguing the David Einhorn favorite has plenty of options to bolster shares and/or improve its capital structure.
- Shah: "First, some of the senior mgmt team members can personally buyback some stock. Second, it appears that more aggressive growth plans are a problem for the stock ... The shares would react positively if mgmt slashed devco guidance to 3GW. Third, mgmt can sell some backlog and generate cash ... Fourth, mgmt can get capital infusion from a large strategic investor that has interest in infrastructure projects ... Fifth, mgmt can restructure the IDR structure at TERP so that the drop downs in 2016 are more accretive. Sixth, mgmt could arrange additional warehouse financing ... Finally, even though it looks like a long shot, SUNE could reach an agreement to walk away from the VSLR transaction."
- SunEdison remains down 40% from where it traded before posting mixed Q2 results and (thanks to an aggressive project construction pace) op. cash flow of -$621M.
- Update (4:00PM ET): Solar stocks reversed course as markets rebounded. TAN has closed up 1%.
Tue, Aug. 11, 11:49 AM
- Eight Credit Suisse analysts each recently picked their top energy stocks to buy in eight different subsectors.
- Alternative energy: SolarCity (NASDAQ:SCTY) is a “key beneficiary” in the trends toward residential solar and lower capital costs.
- Independent refining: Marathon Petroleum's (NYSE:MPC) deal for Hess' retail business is well timed.
- Integrated oil and gas; Marathon Oil's (NYSE:MRO) upstream cash margins “have room to rise as shale production rises and the oil price recovers.
- MLP: Genesis Energy (NYSE:GEL) is defensive in its direct exposure to commodity price weakness and offensive in distribution growth expected following its recent acquisition of offshore assets from Enterprise Products.
- E&P: Devon Energy (NYSE:DVN) has a strong hedge position and strong oil growth relative to peers.
- Oil services and equipment: Schlumberger's (NYSE:SLB) ability to optimize margins and cash flow even in a down market makes the stock attractive.
- Oilfield services and marine transport: Euronav (NYSE:EURN) has flexibility for fleet acquisitions and is free to return 80% of net income to shareholders via dividends.
- Small- to mid-cap E&P: PDC Energy's (NASDAQ:PDCE) three-year projection of up to 40% production growth from Wattenberg even if oil prices remain as low as $50/bbl is impressive.
- Earlier: Credit Suisse lifts view of MLPs, sees 40% upside on revision to mean yield
Fri, Aug. 7, 2:56 PM
- David Einhorn can't be pleased: SunEdison (NYSE:SUNE) is now down 34% since posting mixed Q2 results and reiterating its full-year system delivery guidance on Thursday morning. Fellow U.S. solar play SolarCity (NASDAQ:SCTY) is down 15% over that same span, though its overlap with SunEdison is limited outside of Vivint Solar (about to be acquired by SunEdison).
- Credit Suisse has defended SunEdison amid the plunge, arguing there's “a fundamental disconnect between the stock performance and the ... stellar execution of the organic project development business that exceeded expectations on all metrics, ... increased disclosure to pacify liquidity concerns, and the company making the (right) decision to ensure accretive drop-down economics.”
- During the earnings call (transcript), management was peppered with questions about solar/wind project ROIs, as well as future capital needs and SunEdison's ability to maintain its breakneck growth rate (the result of both internal financing/construction work and M&A). CFO Brian Wuebbels reiterated SunEdison's internal project development ops (i.e. the DevCo) expect to reach cash flow breakeven in 2016, and noted recent capital raises were oversubscribed.
- SunEdison's Q2 results, guidance/details
Thu, Aug. 6, 12:00 PM
- North American solar plays SolarCity (SCTY -8.6%), SunPower (SPWR -5%), and Canadian Solar (CSIQ -5.1%) are seeing big losses after SunEdison (down 21%) posted mixed Q2 results - revenue beat, EPS missed - and reiterated its full-year system delivery guidance. The Nasdaq is down 1.7%.
- Vivint Solar (VSLR -5.9%), set to be acquired by SunEdison for a mixture of cash, stock, and convertible debt, is also off. So is inverter/power optimizer maker SolarEdge (SEDG -10.7%), which reports on Aug. 12.
- The Guggenheim Solar ETF (TAN -5.1%) has more than given back the big Wednesday gains seen following First Solar's earnings.
Wed, Aug. 5, 10:32 AM
- SolarCity (NASDAQ:SCTY) is acquiring ILIOSS, a major Mexican commercial/industrial solar project developer, for an undisclosed sum.
- SolarCity: "Mexico's combination of high electricity rates, favorable solar economics and massive solar resources makes it one of the most promising solar markets in the world. As a combined entity, SolarCity and ILIOSS expect to be able to allow many commercial and industrial customers in Mexico to pay less for solar power than they currently pay for electricity. GTM Research expects commercial and industrial solar deployment in Mexico to increase more than 1,000 percent between 2014 and 2020, with more than 1,000 megawatts installed in that timeframe."
- The acquisition follows SolarCity's launch of services aimed specifically at U.S. SMBs. Like many other solar names, SolarCity is rallying in the wake of First Solar's Q2 beat and strong guidance. The Nasdaq is up 1.3%.
Tue, Aug. 4, 8:05 PM
- The utilities (NYSEARCA:XLU) sector was Wall Street's biggest decliner today as natural gas was the surprise loser from Pres. Obama’s climate plan, with the White House apparently abandoning its previous enthusiasm for gas as a cleaner alternative to coal.
- Gas producers were "confused and disappointed" that the administration eliminated an earlier projection that natural gas would contribute much more electricity, instead increasing the role of renewables; also perplexed were utility companies, who have led a power transformation and spent hundreds of millions of dollars to switch generating plants from coal to shale gas.
- American Electric Power (NYSE:AEP) CEO Nicholas Akins says the U.S. does not have the luxury of being able to ditch nat gas, saying the only way to power big industrial processes is through large-scale, 24-hour generation close to consumers - “solar doesn’t provide that and wind doesn’t provide that."
- The final plan is considered a boon for companies such as SolarCity (NASDAQ:SCTY) and NextEra Energy (NYSE:NEE) that have invested billions in renewable generation, but Sanford Bernstein calls NRG Energy (NYSE:NRG) the biggest potential loser from the plan, saying profits in some scenarios could tumble by half because most of its electricity comes from coal plants that are in EPA’s cross-hairs.
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Wed, Jul. 29, 6:05 PM
- SolarCity (NASDAQ:SCTY) installed 189MW of solar systems in Q2 (168MW residential), +77% Y/Y and above guidance of 180MW. Installations are expected to rise to 260MW in Q3, and total 920MW-1GW in 2015. The company previously guided for 920MW-1GW of deployments. A system is considered installed when construction is finished, and deployed after it passes inspection (typically one to several weeks later).
- Metrics: Bookings rose 81% Y/Y to 395MW, and the customer count rose 21% Q/Q and 86% Y/Y to 262,495. Cost/watt fell 1% Q/Q and 3% Y/Y to $2.91; SolarCity is aiming for $2.50 by 2017. Blended installation cost fell 7% Y/Y to $2.13/watt. Estimated net retained value is up by ~$300M Q/Q to $3.06B. Estimated nominal contracted payments remaining rose 30% Q/Q and 132% Y/Y to $7.7B.
- Financials: Operating lease/system incentive revenue rose 81% Y/Y to $78.3M; Q3 guidance is at $80M-$86M. Energy system/component revenue rose 35% to $18.2M; Q3 guidance is at $26M-$28M. GAAP operating expenses rose 81% Y/Y to $175.7M, with sales/marketing spend rising 103% to $113.2M. SolarCity ended Q2 with $489M in cash, $624M in long-term debt, $796M in convertible debt, $202M in solar bond debt, and $311M in solar asset-backed notes (about to rise).
- Thanks to aggressive spending and installation growth, SolarCity forecasts Q3 EPS of -$2.05 to -$2.15, below a -$1.59 consensus.
- SCTY -0.6% AH to $57.70.
- Q2 results, shareholder letter (.pdf), slides (.pdf)
Wed, Jul. 29, 4:22 PM
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