EnerNOC shares rise in trading debut
Clean power solutions company EnerNOC Inc. made swift gains on its first day of trading on the Nasdaq Stock Market this morning.
The Boston company opened at $30.76 a share, an 18 percent premium to its initial public offering price of $26. The stock was recently trading at $31.19, up 20 percent.
EnerNOC's public offering priced above the expected range of $23 to $25, which was raised earlier this week from $21 to $23.
Some 3.75 million shares were sold into the offer, which was underwritten by Credit Suisse Group (CS) and Morgan Stanley (MS).
EnerNOC's IPO has drawn comparisons to that of another company that went public this year, Comverge Inc., which soared 24 percent on its first day of trading in April.
"They both are in the sweet spot of companies that are considered 'green'," said Scott Sweet, managing director of IPOBoutique.com, an IPO research service.
Sweet added that some investors could include mutual funds that have a mandate to buy socially responsible companies.
EnerNOC uses its network operations center to remotely manage and reduce electricity consumption across commercial, institutional and industrial customer sites.
The aim is to provide an information-based and responsive electric power grid.
EnerNOC's customers include electric power grid operators and utilities, as well as commercial, institutional and industrial end-users of electricity.
The company says grid operators and utilities traditionally increase capacity by building additional power plants to avoid service disruptions such as brownouts during periods of peak electricity demand.
As an alternative, EnerNOC monitors electricity consumption and alerts its customers to reduce their usage during peak periods.
EnerNOC is paid recurring revenue for managing the demand response capacity.
At April 15, the company had more than 1,308 customer sites and about 579 megawatts of demand response capacity under its management.
EnerNOC's revenue grew to $26.1 million last year from $9.8 million in 2005. Its net loss however widened to $5.8 million last year from $1.8 million in 2005.
In the first quarter, EnerNOC's revenue was $10 million while its net loss was $3.8 million.
Venture capital firm Foundation Capital Management remains EnerNOC's major holder with 19.7% of the company, down from 24.7% before the public offering.
While EnerNOC appears have a strong position in the market, it said it faces competition from clean and intelligent power solutions providers.
It also competes with traditional supply-side resources such as natural gas-fired peaking power plants.
EnerNOC plans to use its net IPO proceeds to fund the expansion of its business, expand its customer base and finance research and development.
It has no plans to pay a dividend in the foreseeable future.
(Dow Jones)
