Sunnova is now entering its first full week as a public company, after an uneven initial public offering (IPO) last week. According to the New York Stock Exchange, the company raised $168 million in its initial public offering, and a regulatory filing on Friday indicates that the company netted $158 million after underwriting discounts and commissions.
This is far below its expectation two weeks ago of bringing in at least $300 million, based on 17.6 million shares and a projected initial price of $16-18 per share. Instead the company sold only 14 million shares at $12 per share.
The suddenly lowered expectations could be due to a note that Sunrun published last Tuesday, in which the company states that it believes that Sunnova has “made certain comparisons of its customer economics to Sunrun that may be misleading or inaccurate because the metrics being compared are inconsistent or different.”
Regardless, this is enough for Sunnova to pay off $57 million in bonds, much of which was due in 2021, and still have $100 million left over.
This $100 million is more than the company’s loss during 2018, but Sunnova lost another $35 million in the first quarter of 2019, largely due to interest expenses. The company’s regulatory filings showed $1.07 billion in debt at the end of the first quarter fo 2019, but $1.77 billion in assets, mostly comprising 455 MW of solar that it owns on the roofs of its 63,000 customers.
Sunnova’s stock has seen a minor rebound after falling to a low of 10.51, and was at $11.44 as of Monday morning. While this is below the $18.77 that Sunrun was trading at when markets closed on Friday, it is higher than Vivint Solar’s $7.96 per share.
It is unclear how much these valuations have to do with fundamentals of these companies, if at all. While Sunrun and Vivint have been public for some time, a handful of regulatory filings are the only publicly available documents on Sunnova’s business model, costs and profitability.
Further complicating this is that the third-party solar model involves outlays of capital to install PV systems, while retaining these as long-term value – making metrics like operating margins and losses less meaningful than they are with other companies.
And due to the reporting requirements of public companies, in the future we at pv magazine expect to be providing a lot more insight into Sunnova’s workings.