By Tom Borelli:
Market forces are turning President Obama’s dream of a renewable energy into a nightmare.
BrightSource Energy, a thermal power solar company, canceled its initial public offering (IPO) at the last minute. Despite the backing of venture capitalists, loans from the government and deals with corporations, the company feared it could not find enough investors for the new stock. According to the New York Times:
As a result, the stock prices of even leading companies are down sharply. Shares of First Solar, for example, are down 93 percent from their 2008 high, closing at $22 on Thursday. Shares of Suntech have dropped 96 percent from their 2007 peak, closing at $2.80 on Thursday. The I.P.O.’s of two alternative energy companies have run into trouble, and the American subsidiaries of Solar Millennium, a German solar thermal power company that is in insolvency proceedings, recently filed for bankruptcy protection.
“It’s an election year, there’s policy risk, these stocks have been serial underperformers,” said Chris Kettenmann, an analyst at Miller Tabak. “The industry pulse that we are hearing is accelerated consolidation.”
And it may get worse before it gets better.
The spectacular failure of solar company stocks and BrightSource’s canceled IPO shows market forces are more powerful than Obama’s command and control energy policy.
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