INVESTORS PREFER SUN TO CORN

Who told?

Investor taste shifts from corn to solar cells; Chinese Sun Power IPOs Are Hot As U.S. Ethanol Loses Steam
Lauren Villagran, June 30, 2007 (AP via San Jose Mercury-News)

WHO
Investors in Initial Public Offerings (IPOs); New Energy Finance, Michael Liebreich, chairman/ceo; BioFuel Energy; JA Solar; Jefferies & Co., Jeffrey Bencik, analyst


WHAT
Of 8 IPOs of alternative energy companies in the first half of this year, only 1 (BioFuel Energy) was in ethanol. 4 Chinese solar IPOs in the same time period were big hits.

WHEN
2006: more success for biofuels. 2007: more success for wind and solar.

WHERE
U.S. and International markets.

WHY
- Biofuel Energy struggled to sell shares in its IPO, cutting its price by more than 1/3 and cutting shares by ½. A doubling of corn prices may be partly responsible.
- The 4 Chinese solar companies pulled in $1.11 billion.
- JA Solar had a return on its IPO price of over 100%.
- More Chinese and North American companies are expected soon.
whole lot of growing to do (click to enlarge)

QUOTES
- Liebreich: "What we're seeing is a very strong pipeline of renewable energy IPOs, both in the United States and overseas…[The solar] sector still hasn't reached its exhaustion point…”
- Bencik: “Solar companies, once they're ramped up, they're solidly profitable…This is not the Internet bubble. These companies have real products and real profits."