The 25-day quiet period on SolarEdge Technologies will come to an end on April 20, 2015, allowing the firm's IPO underwriters to publish analyses of SolarEdge, a company that designs, manufactures and markets DC optimized inverter systems for solar photovoltaic installations on April 21.
SolarEdge got off to a strong start on the market by opening 11% above its IPO price of $18. The stock has climbed steadily since its first day of trading, and it currently hovers around $24.
SEDG's share prices will likely see a temporary rise in response to the release of the underwriter reports.
Steady Early Market Performance
SEDG's IPO was priced at the high end of its expected price range of $16 to $18 per share, at $18 per unit. The stock closed at $20.70 on its first day of trading for a gain of 15%. SEDG has risen steadily, and currently it trades at $24.61 (afternoon sessions, 4.14.2015).
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Business Overview: Company that Designs, Manufactures and Markets DC Optimized Inverter Systems for Solar PV Installations
SolarEdge Technologies designed an intelligent inverter solution that optimizes the harvesting and management of power derived through solar photovoltaic systems. This direct current (DC) inverter system enhances the power generation capabilities at the individual PV module level, resulting in a more efficient system and lower costs. The company markets its products to a wide array of solar market segments including small utility-scale, commercial and residential solar installations. The proprietary system integrates inverters, power optimizers and a cloud-based monitoring platform.
Distributed power technology optimizes the DC generated by the solar module and feeds the resulting power to an inverter that converts the optimized DC into AC for transmission. The SolarEdge system utilizes power optimizers with individual PV modules in order to increase efficiency in the harvesting and management of power. It does this by centralizing the grid interaction and alternating current (AC) through a simplified DC-AC inverter. The company promotes this technology as enabling maximum power production, optimal roof utilization, improved maintenance and troubleshooting through its monitoring system, and automatic DC shutdown for maintenance personnel, installers, and emergency response teams through its SafeDC mechanism. Since 2010, SolarEdge has shipped over 1.3 Gigawatts of its systems to consumers in over 70 countries.
Israel-Based Executive Leadership
CEO, Chairman and Co-Founder Guy Sella has been in his positions at SolarEdge since its inception in 2006. Prior to founding SolarEdge, Mr. Sella held senior positions at AeroScout and Vidyo. He has acted as the director of technology for the Israeli National Security Council and as secretary for the National Committee for Cyber Protection. He holds a B.S. in engineering from the Technion, Israel's Institute of Technology in Haifa.
CFO Ronen Faier joined SolarEdge in 2011. Prior to joining the company, Mr. Faier held executive financial positions at Modu Ltd. and MSystems. He holds a CPA license in Israel, an MBA from Tel Aviv University and a B.A. in accounting and economics from the Hebrew University in Jerusalem.
Competitors: SMA Solar Technology, ABB Ltd., and Enphase Energy
The company's DC optimized inverter system is an innovation that generally competes against conventional inverter designs from manufacturers including SMA Solar Technology, KACA new energy GmbH, and ABB Ltd. In the North American residential markets, SolarEdge faces competition both from conventional inverter manufacturers and microinverter producers including Enphase Energy, SMA Solar Technology, Ampt, Tigo, Enecsys,and ABB Ltd.
Conclusion: Buy Prior to Event For Full Gains
SolarEdge Technology's IPO underwriters will likely seek to capitalize on the stock's recent growth through the release of positive reports beginning with the conclusion of the quiet period. These underwriters include: Deutsche Bank Securities, Goldman Sachs, Cannacord Genuity, Needham & Company, and Roth Capital Partners.
Recent research from our own firm, along with academic studies from the University of Florida, University of Kentucky, and Clemson University highlight above-market returns in the ~2% range for specific IPOs. Our two windows of interest are: (-5,+2) days and (-11,0) days surrounding the IPO expiration event, Day (0).
Investors who wish to buy into SolarEdge may wish to take advantage of the strong buying opportunity presented by the upcoming quiet period expiration.