Don't Follow the Insiders to SolarCity
SolarCity (SCTY) went public earlier this month, and already a pair of insiders are using the opportunity to buy additional shares in the company. Elon Musk, who became a billionaire as the co-founder of PayPal and who currently sits on the board of directors, bought nearly 2 million shares of SolarCity at the IPO price of $8, and fellow board member Nancy Pfund bought 300,000 shares. The company had originally planned a price of $13 to $15 per share, so these two insiders seem to have taken advantage of the sudden discount in the value of the equity (it currently trades at $10.65, still well below the planned IPO price).
SolarCity installs rooftop solar panels for homeowners for free, and then leases the system. It also serves government and business customers. Its products enable pollution-conscious energy users to use solar energy, and the system can result in savings on utility bills (though we'd imagine that much of its customer base doesn't require solar to be lower cost in order to buy). The company's current market capitalization is only $120 million, but over half a million shares have been traded each day that it has been a public company, so it should offer over $1 million in average daily dollar volume....483 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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