Shares of SolarCity climbed more than 6% in the premarket on news that private equity giant Silver Lake Partners will announce a large, new investment in the solar power company later today.
Dealbook’s Michael J. de la Merced reports that
Silver Lake Kraftwerk, the private equity firm’s clean energy investment arm, will announce a $US100 million investment in SolarCity’s convertible notes on Wednesday.
SolarCity installs solar panels on residential and commercial buildings. The company was founded by Peter and Lyndon Rive, and Elon Musk, their cousin, is chairman. Musk is also the largest shareholder.
Musk is expected to invest $US10 million, while Lyndon Rive is expected to put in $US3 million, the Dealbook report said.
SolarCity’s share price dropped by more than 50% this year.
The company has been a target of prominent short-seller Jim Chanos. In August, Chanos, founder of Kynikos Associates, said that he thinks SolarCity’s business model is similar to that of a subprime financing company.
The company also reported disappointing third quarter earnings. In a shareholder letter in late October, the company said that it sees year-end installations of its solar panels below the low end of guidance:
Based on our monthly installation run rate exiting the quarter and the growth in residential capacity we have already experienced in October, we are estimating installations of 280 to 300 [Mega Watts] in the fourth quarter. This would represent year-over-year growth of 58%-69% and would translate into full-year 2015 installations of 878-898 MW. This is below the low end of our prior annual guidance as we are cognisant of the inherent uncertainty in the record amount of commercial installations we have planned in December, particularly in light of potential weather-related disruptions and the holiday season.
The company had previously expected installation of 920 to 1,000 megawatts.
Here’s a chart of how SolarCity’s shares have performed this year:
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