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Solar IPOs: Which Solar Firm Will Be Next?

NEW YORK ( TheStreet) -- Rumors of solar-sector initial public offerings surface more often than the IPOs seem to happen. Especially in the past two years, the road from venture-backed to public company for solar players has been blocked by the poor capital markets and solar-specific conditions.

The good news is that at least right now, the solar market has actual IPOs to keep its eyes on. Solyndra (SOLY), which is planning to go public in a $300 million deal led by Goldman Sachs (GS) and Morgan Stanley (MS), was the 12th venture-backed firm to file for an IPO since the end of October, after an IPO lull for venture investments that had not occurred in decades. **

On Wednesday of this week, China's Daqo New Energy, a polysilicon manufacturer, filed with the Securities and Exchange Commission to go public.**

At the same time though, the outlook for solar IPOs is far from clear, with Trony Solar having recently shelved its plans to complete an initial public offering.

Showing a cost advantage, and having a unique technology, is a major component of IPO appeal. Paul Leming, solar analyst with Soleil/Princeton Tech Research, says Solyndra has both appeal factors going for it, and that Solyndra's total installed system cost to customer, in particular, has made the coming IPO an "eagerly awaited one."

STR Holdings (STRI) went public in November, but it did not achieve it price objective, opening at $10 a share. That was below an estimate of $11 to $13, which had itself been lowered from an initial filing price of $13 to $15. Shares of STR have soared since the IPO, though. On Friday, after a buy rating from Hapoalim Securities analytical bear Gordon Johnson, STR was up more than 80% since its IPO to $18.45 .

Daqo New Energy, like STR Holdings, is an exception to the private solar companies usually bandied about in IPO rumors. Like STR, Daqo has an existing, profitable business, in a specific solar niche -- polysilicon production -- as opposed to operating in the module manufacturing or solar systems installation business.

The IPO candidates representing the next generation of solar module technology are often at a stage before which they have a proven competitive cost-structure.

It's obviously a mixed capital markets bag -- a shelved solar IPO; a solar IPO that did not perform as well as expected, but has since been on a share rise; and upcoming IPOs that solar-market watchers hope will set the tone for a much more active public capital raising environment, but which represent very different ends of the solar world -- from raw polysilicon production to the next generation module technology.
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