Why SolarCity Corp's Shares Popped

Before you go, we thought you'd like these...
Before you go close icon

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of solar installer SolarCity Corp jumped as much as 10.6% today after announcing a new financing deal.

So what: SolarCity is selling $54.4 million in notes backed by the cash flow from a pool of solar systems. The notes will come with a 4.8% interest rate, and have a maturity date of December 26, 2026. 

Now what: This is the first real solar securitization deal, and opens up a new financing option for the industry. For SolarCity, it gives the company a way to finance projects without paying for them from its own balance sheet. Long term, that will help the company finance growth.

This move has been widely expected by the industry, so it's not a huge surprise, which is why shares fell to a 3% gain late in trading. Still, it's a step forward, and one reason SolarCity is a leader in the residential solar market.

Six more top-growth stocks
SolarCity is a hot-growth stock, and if you're interested in more growth picks, we have just the place for you. Motley Fool co-founder David Gardner, founder of the No. 1 growth stock newsletter in the world, has developed a unique strategy for uncovering truly wealth-changing stock picks. And he wants to share it, along with a few of his favorite growth stock superstars, WITH YOU! It's a special 100% FREE report called "6 Picks for Ultimate Growth." So stop settling for index-hugging gains... and click HERE for instant access to a whole new game plan of stock picks to help power your portfolio.

The article Why SolarCity Corp's Shares Popped originally appeared on Fool.com.

Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool recommends SolarCity. The Motley Fool owns shares of SolarCity. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

People are Reading