Shares of ReneSola (NYSE: SOL), a Shanghai-based solar-wafer manufacturer, fell 1 cent to close at $12.99 per share during the company's New York Stock Exchange debut Tuesday.
The company, which raised $119.6 million in the offering, already has been trading on the London Stock Exchange's Alternative Investment Market, or AIM, under the ticker symbol "SOLA."
ReneSola offered American Depository Shares at $13, which is 9.7 percent lower than Monday's closing price on the AIM, with each ADS representing two AIM shares, according to Renaissance Capital's IPOHome.com and the Associated Press.
The company had said Monday it would offer the shares at a discount of between 5 and 10 percent below the closing AIM price.
The discount -- and the flat IPO -- could be an indication that market conditions are declining for solar companies planning to go public.
"It's not uncommon for secondary offerings to be priced at a discount, but this is at the low end of the range and a 10-percent discount is pretty substantial for a company of that size," said Travis Bradford, president of the Prometheus Institute, a research nonprofit organization and Greentech Media partner. "It's getting harder to raise capital on the public markets, for these companies, and if that continues, it may impact future growth plans for other companies that still need to access the public markets to fund their growth strategies."
The ReneSola IPO isn't the first indication that it is becoming more difficult to raise capital.
Jinzhou, China-based Solargiga Energy last week cut the price target for its Hong Kong offering to about $264 million, from a previous range of up to $292 million, citing poor market conditions, according to Reuters. And overall, share prices have been sinking in the last month. For example, the WilderHill Clean Energy Index, which tracks U.S. clean-energy stocks, fell from an opening of 288.21 points on Jan. 2 to close at 225.94 points Tuesday.
If the trend continues, it could have a big impact on the solar industry, Bradford said.
"If companies can't raise money, it'll change people's future expectations of their performance," he said. "It used to be the announcement for additional capital was a positive for the company, and it seems today to be viewed as neutral to slightly negative. At some point, it could go hard in the other direction -- that's the risk."
So far, the market conditions haven't stemmed the flow of solar IPO announcements, particularly those from Chinese solar companies (see Poor> Market Conditions? Who Cares?
The same day as ReneSola's offering, thin-film firm Shenzhen Topray Solar Co., based in Shenzhen, China, issued its prospectus (see this post on Greentech Media's Green Light blog).
Qiangsheng Photovoltaic Technology, a thin-film producer in Hong Kong, is planning a $250 million IPO on the Nasdaq, according to Reuters.
Solargiga Energy is charging ahead with its IPO even though it had to lower its price target.
And in Russia, silicon developer Nitol Solar, based in Usolie, in Siberia, is eyeing a listing on the London Stock Exchange that could raise between $250 million and $300 million, according to the Financial Times.
It could be that companies fear the markets might not turn up anytime soon.
"For a lot of companies, it's better to have money now rather than the possibility of not having it later," Bradford said. "It does happen from time to time that the capital markets will close to industries or subsectors, and if you need the capital and the capital markets close, it can be somewhere between bad and fatal. That's the real concern."
While he didn't have data on public money being invested in solar companies, Bradford said he's certainly noticed a shift.
"Discounting and dropping price ranges is different than what we saw a year ago, when companies were coming out above their target range and the stock would go up," he said. "Now they're coming out below their range and the stock goes flat. That certainly means that capital markets aren't as open as they were a year ago for additional capital expansion in the industry. The question remains how long that hesitation lasts -- it could be the pause that refreshes or the beginning of a long, dry spell."