Successful investing in initial public offerings is like anything else -- you usually have to be in the right place at the right time to do well. FirstWind Holdings is a growing company trying to raise a $300 million life-line in hopes of eventually becoming profitable, but its window for getting such a risky deal done is probably gone with the wind.

FirstWind is a builder and operator of wind energy products with three geographic segments in the United States. It has targeted the Northeast, Rocky Mountain West, and Hawaii, all markets with relatively high electricity prices and strong wind that can be generated at low cost.
  • FirstWind Holdings - WIND
  • Lead Underwriter -- Credit Suisse
  • 12 million common shares
  • Current price range -- $24 to $26
  • Deal size to the mid-range -- $300 million
  • Sector -- energy, alternate sources

Another important factor is local government support for future expansion with future technology advancements and as new capital becomes available. It currently operates seven projects with capacity of 504 megawatts, double its output of just 18 months ago, in addition to two lines connected to the electric grid.

Most of the proceeds from the offering will go to further increase capacity towards its goal of ramping up to 1,900 MW by 2014.

As is the case with many alternative energy companies, FirstWind will stay in business as long as it can attract private investment and lucrative government subsidies to sustain the never-ending operating losses. The company hasn't had much trouble overcoming the more than $200 million in accumulated losses since its 2003 inception, but past performance is no guarantee of future success.

For governments, the possibility of cleaner, sustainable sources of energy produced locally have long been a pipe dream if they can ever compete with fossil fuels on price. As for hedge funds and venture capital investments, wind energy represents a calculated risk not unlike buying a lottery ticket that will have a huge payout if research and development teams make an important breakthrough.

Our primary concern is that FirstWind is approaching a gun-shy IPO market with all the symptoms of plagued offerings of the past, not the least of which is more than $600 million in debt.

There was a time when the economy was booming that a long string of losses could be overlooked for the mere possibility of a home run, but many companies including NXP Semiconductors ( NXPI - Get Report), Trius Therapeutics ( TSRX), and Anthera Pharmaceuticals ( ANTH) have shown the skittish market hasn't shown an appetite for more risky deals.

We should mention that two solar companies -- JinkoSolar ( JKS - Get Report) and STR Holdings ( STRI) -- have been very well-received after their offerings, but they are both profitable and have significant operations overseas that make them entirely different business models in addition to the obvious differences between solar and wind energy.

While there is no way of accurately forecasting what the success of long-term investments in making wind energy economically viable will be, we do have a sense of the markets appetite for risk. With that in mind, we expect the company to have a hard time persuading investors to throw up a Hail Mary pass and are recommending alternative offerings with more visible growth expectations. in Millburn, N.J., is the oldest equity new issues research firm on the Street, with 20 years of experience. IPOfinacial projects the opening premiums of IPOs and secondaries before they price. Its research packages are available to individual investors and institutions alike.