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Market Overview

Solar Stocks Mostly Higher After 8Point3 Energy IPO Valuation

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Shares of First Solar, Inc. (NASDAQ: FSLR) and SunPower Corporation (NASDAQ: SPWR) were trading higher on Wednesday after the companies released details of a limited partnership to own and operate a portfolio of selected solar energy generation assets.

The companies announced that it has commenced an initial public offering of Class A shares for their partnership, named 8point3 Energy Partners.

According to a press release, 8point3 Energy Partners is classified as a "growth-oriented limited partnership" between the two companies whose objective is to "generate predictable cash distributions that grow at a sustainable rate." The entity intends to do business with commercial, industrial and residential customers in the United States and other select markets, primarily within the countries that comprise the Organization for Economic Co-operation and Development.

8point3 is offering 20 million shares to the public with a price to be between $19.00 and $21.00 per share. The new issue will trade on the NASDAQ Global Market under the symbol "CAFD."

First Solar and SunPower will use the proceeds from the offering to purchase common units of 8point3 Operating Company, LLC, the entity that holds 8point3 Energy Partners' project assets. 8point3 Operating Company will use the proceeds from the sale of it common units to make a cash distribution to First Solar and SunPower and for general corporate purposes, including to fund future acquisition opportunities.

Market Reaction

While shares of First Solar and SunPower were trading noticeably higher for the day, other stocks in the solar power sector were lagging. Shares of Sunedison Inc (NYSE: SUNE) were trading higher by only 0.75 percent by Wednesday afternoon. At the same time, shares of SolarCity Corp (NASDAQ: SCTY) were higher by 0.80 percent.

Shares of Vivint Solar Inc (NYSE: VSLR) enjoyed a brief rally Wednesday morning, but were trading lower by 0.53 percent during the afternoon. Similarly, TerraForm Power Inc (NASDAQ: TERP) (SunEdison's YieldCo) saw a brief rally during the morning trading session, but was lower by 0.76 percent by the afternoon.

 

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