GT Solar endures rocky IPO

A large IPO in the solar industry was marred last week after oil prices dipped, and the loss of a major customer knocked out almost a tenth of its booked business.

GT Solar International, which makes furnaces that produce material for use in solar cells, fetched $500m in its IPO, getting a price of $16.50 per share for its 30m share flotation when it began trading last week. Stocks were subsequently hit by the news that a large customer, LDK Solar, had signed with a Chinese competitor, JYT, to purchase furnaces. The competitive product, which gives LDK Solar the exclusive right to purchase the technology, will see furnaces delivered to its plants from now through 2010, and will lower LDK’s manufacturing expenses.

"This announcement by LDK does not in any way impact GT Solar’s backlog, nor do we believe it will have any effect on our internal targets or projections," GT Solar said in a statement. "In fact, LDK Solar’s total orders represent less than 20 per cent of our current backlog. Moreover, LDK’s furnace orders represent less than eight per cent of our current backlog."

The IPO occurred during a shrink in oil prices that dipped below $122 a barrel yesterday, following a high of $147 per barrel two weeks previously. GT Solar dipped to a low of $9.30 per share on Friday, rebounding to around $12.90 yesterday, still shy of a $17 trading high.

In other solar news First Solar, a maker of thin-film solar cells that fetched $400m for its IPO in November 2006, signed a deal to build a 10mW power plant for Sempra Generation, in Nevada. First Solar is now trading at over 10 times its IPO value.