Second generation biofuel company Codexis, which made its IPO at the beginning of the unfolding of the European credit crisis, has also experienced a substantial decline in investor confidence-a 35% drop in stock price since its April 21 debut.
On the other hand, the recent IPOs of Jinko Solar and Tesla Motors have fared significantly better, with Jinko Solar's stock price increasing a substantial 98% since its May 13 IPO, and Tesla's stock up nearly 70% in early trading and 13% since its June 29 debut.
Tesla Motors has attracted a considerable amount of attention for being the first and only company to produce a long-range battery powered car-the highly publicized "Roadster"-as well as developing strategic partnerships with industry incumbents Daimler and Toyota.
As a result, the IPO was an instant hit with investors-the company originally intended to raise $155 to $178 million, but increased the offering price when it recognized the extent of investor enthusiasm and ultimately raised $260 million in June 2010, making it the largest U.S. clean energy IPO of 2010.
This is a remarkable feat in the current climate of investor caution, and Tesla's success can be attributed to the fact the company is operating in a sector of growing investor interest (i.e. energy smart technologies) and offers a differentiated product with strategic partnerships.
Still, the current environment remains one of investor caution, with two U.S. IPOs being pulled in June, and another in early August, with a cumulative potential deal value of nearly $745 million. So far in 2010, the aggregate value of IPOs that have been postponed or cancelled far exceeds the value of those that have actually occurred. Some companies have been in the IPO pipeline for several months now, waiting for an appropriate market opening.
Jinko Solar is an exception, seeing a substantial increase in stock price since IPO. The stock didn't get much of a reception when it went public - the majority of the stock price increase occurred in August, following the release of its Q2 2010 earnings. Q2 revenues and module shipments were up markedly from Q1 and substantially exceeded market estimates, resulting in upward revisions in expected annual earnings from equity research analysts and increased investor interest in the stock.
Private Equity Market Activity
Private investment activity in clean energy in the U.S. has not tracked the public markets - there's been vast growth in investment from Q1 to Q2 2010.
Private market investor sentiment is less cautious at present, with investors reporting an abundance of high-quality companies to choose from, relatively low valuations, and less competition than before the financial crisis. Therefore, for venture capital and private equity firms with capital, early and mid-2010 has been an optimal period in which to invest.
Q1 2010 investment was $1.7 billion, and Q2 2010 investment was $2.1 billion, both of which exceeded the previous four quarters of investment by a considerable margin.