A string of successful initial public offerings by solar power companies might prove that alternative energy issues are popular with investors, but the sentiment is hardly universal. Take last week’s debut of Ocean Power Technologies Inc., which makes specialized buoys that convert wave motion into power. Its shares sank to $15.55 at the close of the week after pricing at $20 on Wednesday.
What does this mean for cleantech investors? Clean energy plays are capital intensive and typically raise lots of money while operating at a loss. Some may argue that the public market is not the place for such speculative companies, but it seems that investors know what they’re doing, which is why Ocean Power's stock price is sinking. While some may point to this lackluster IPO or the recent glamorization of all things cleantech as the beginning of the end for the alternative-energy investment frenzy, there’s still more to be gained technologically and financially from investing in cleantech.
In fact, Ocean Power’s foundering may have more to do with a general unfamiliarity with wave-generated electricity and the company's lack of profitability.
There is plenty of potential for real returns as the world adds new ways to power its increasing demand for electricity. Solar is so popular right now because the technology and its markets are established. Given time — and some profits — companies offering newer varieties of cleantech are likely to have their day in the sun too. —Stacey Higginbotham
See story from The Deal
See press release from Lux Research
Continue reading below
