http://bit.ly/iZO1P5
Summary:
A alternate-energy company which builds Solar Paneling and that is backed Google, named BrightSource Energy recently announced that in order to raise the $250 million it needs to begin expanding its' Southwestern U.S. solar thermal operations, it will begin selling stock in an Intial Public Offering (IPO). They specialize in the Solar Thermal form of Solar Panel energy, which allows for Solar energy to be stored. This is the mostly favored form of Solar energy because it can help power the places who are connected to it even when the sun is down.
Opinion:
I think this is great for the Solar Energy industry and the Alternate Energy industry in general. It will generate alot of revenue and if all goes well for BrightSource, possibly open up a new source of revenue garnering for other Alternate-Energy companies. It will also increase the willingness of investors to invest in these types of IPO's if they see big returns from this IPO. If all goes as expected this is exactly what will happen and we could possibly see many more such stocks crop up, and overall see a huge gain for the support and funding of Alternate Energy resources. If that is indeed the case we will looks back on BrightSource Energy as the pioneer that helped to kickstart the Altertative Energy industry.
Questions:
1) What do you think of companies offering these types of stocks? Good Or Bad? Why?
2) What would be the potential impact of this?
3) What do you think above impact will have on the rest of the Alternate Energy Industry both now and in the future? Good, Bad Or no impact? Why?
4) Would you do the same if you were the CEO of BrightSource Energy and you needed to raise $250 million to expand operations? Why or Why not?
Reflection
ReplyDeleteBrightSource, I think, will be the pioneer of public investment in alternative energy companies. It looks promising and if successful will probably convince people to invest in other similar businesses. Part of the reason that alternative energy technologies didn't catch on even after the oil crisis of the 1970s and other like incidents was because of the expense and lack of research. Right now fossil fuels are a lot cheaper, and no one wants to invest in alternatives because they are expensive to set up. Hopefully this will trigger a chain reaction that will inspire other people to share in the wealth of investing in these markets, a la the dot-com boom of the 1990s. This is actually very coincidental; Enrichment is studying the stock market right now. (cue Psycho theme)
Responses
1) See above
2) See above
3) I think that the alternative energy industry is going to expand rapidly once more companies like BrightSource go public. Again, this may be the next dot-com boom.
4) I'd definitely go public. Like I said earlier, this could trigger more investments in alternative energies. And someone has to be the brave soul and go first if that boom is going to happen.
I don't really think this is a big deal, and I doubt it will affect the alternative energy industry much, if at all. While it's great that an alternative energy company has grown large enough to be able to hold an IPO, there not really doing anything ground breaking, as IPOs are fairly common.
ReplyDeleteAs Eric mentioned, we've been learning about the stock market in one of our other classes. Just because a company hold an IPO isn't any guarantee of their success. Even if they raise the funds they are looking for, they are still entering risky territory by expanding. Even with the investments, the company could have made a bad decision by expanding, fail miserably, and be forced to dial back operations, go bankrupt, or sell/merge with a competitor. I think you're celebrating a bit too early.
1) Well, since this is pretty much the only kind of stocks companies can offer, it's pretty much IPOs or nothing.
2) Either:
A) BrightSource raises the money it wants, expands their operations, and does wonderfully, spreading solar power, increasing solar energy's market share, and encouraging a slew of peers to do the same thing.
B) BrightSource raises the money it wants, expands their operations, and fails miserably. The results could be as disastrous as company bankruptcy, worsened public opinion of solar energy, and scaring peers away from expansion.
C) BrightSource's IPO fails and it doesn't raise the money it needs.
3) It's too early to tell. If BrightSource does well, then this will do great things for the alternative energy industry, and encourage many peers to follow in their footsteps. If they fail, they will scare peers away and hurt the industry.
4) It depends. IPOs are great ways to raise funds, but the thing about INITIAL public offerings is that you can only hold them once. If a practical alternative existed, I would try that first.
Opinion/Reflection:
ReplyDeleteI personally think that what BrightSource Energy is doing (selling stock in an Initial Public Offering) is only going to benefit the alternative energy industry and the company itself, not really consumers. Although people may think they are going to benefit by investing in the company (which, who knows, they might), it is solely the company themselves that BrightSource Energy is selling the stocks for. Profit before people is a motto that a lot of companies go by.
However, I think that BrightSource Energy is doing a good thing for the alternative energy industry. With people exposed to alternative energy sources, like solar power, they may become more widely used. This would be great for the environment as well. If people think it’s a good idea to use alternative energy sources than they may begin using them in their homes (for instance, installing solar panels). Because the environment and the alternative energy industry will benefit, I think that what BrightSource Energy is doing is a good thing.
I’m not entirely sure how the public will respond to buying stocks in this company. Because BrightSource Energy has never sold stocks before, I’m sure people will be a little wary of investing their money in the company. In addition, I feel like a lot of people (like me for example) may think that this is all just a plan for the BrightSource Energy company to bring in more money. The article even states that BrightSource Energy is selling these stocks to raise 250 million dollars, which will be used to expand its’ Southwestern U.S. solar thermal operations. But, the company is backed by Google, so a lot of people might support it. I honestly don’t know what will happen when these stocks go on sale.
Finally, this article relates to class because we are learning about different types of alternative energy sources, like tidal, wind, wave, nuclear, hydroelectric, biomass and solar (which is what this article is about). People need to start using some, if not all, of the aforementioned forms of alternative energy because eventually coal will run out. While nuclear power isn’t renewable (because it needs uranium in order to work, and there is only so much uranium that we can obtain), all the others are, so they will be good sources to use instead of coal. And all the forms of alternative energy have disadvantages, but coal does too, so I really don’t see what the public’s problem is with switching to alternative energy sources.
Answer the Questions:
ReplyDelete1) I personally think that the companies offering these types of stocks are doing it for their own benefit. They don’t really care about consumers or forms of alternative energy, all they want is to bring in money for their own company. However, selling these stocks is good publicity for the alternative energy industry (in this case, solar power) and hopefully people will start to realize that we need to begin using other energy sources. Coal will eventually run out, and a lot of people don’t know that. And for those who do, sometimes they simply don’t care. As long as coal can be used during their lifetime, they’re fine and don’t have to worry about it.
2) The potential impact of this is a boost in the alternative energy industry because people will be more widely exposed to a form of alternative energy, solar power. In addition, the company will be able to expand its’ Southwestern U.S. solar thermal options if they are able to bring in enough profit from selling the stocks.
3) I think the above impact will have a good impact on the rest of the Alternative Energy Industry both now and in the future. Now it will make people more aware of solar power, and once they learn about one alternative source, they’re bound to learn about others. And if different forms of alternative energy become more widely used, it will have a lasting impact, which will continue to help the Alternative Energy Industry in the future.
4) If I was the CEO of BrightSource Energy and I needed to raise 250 million dollars to expand operations, I would probably do the same thing. The whole company would profit from selling the stocks, we would be able to expand our operations, the public would think they’re benefiting by investing in the stocks (manipulating people is always a good thing companies are able to do), and the Alternative Energy Industry (which has a positive impact on the environment) would be boosted. So, if I was the CEO of a company, I would look at the whole situation as win-win for everyone.
Ask more Questions:
1. Do you think that people will buy the stocks BrightSource Energy is selling?
2. Will BrightSource Energy make enough money to expand its’ Southwestern U.S. solar thermal options?
3. Why do you think BrightSource Energy announced the reason it was selling the stocks? Do you think people would be more or less willing to buy the stocks if the reason was unannounced?
4. Will the fact that BrightSource Energy is backed by Google help them when they sell their stocks?
5. Do you think the solar energy industry will be boosted more than other alternative energy sources?
6. Will other companies follow in BrightSource Energy’s footsteps?
Add a graphic
http://cleaninvest.wordpress.com/2009/09/11/brightsource-announces-new-partnership-with-bechtel/brightsource-logo/
This graphic is a picture of BrightSource Energy’s logo