Green IPO drought to end, but boom still elusive

SAN FRANCISCO/LOS ANGELES (Reuters) - Several green technology companies are expected to launch initial public offerings this year, ending the industry drought, but not all are likely to find a friendly welcome.

Electric carmaker Tesla Motors, solar company Solyndra and biofuels firm Codexis are among those that have registered for IPOs, and analysts say several other companies are waiting in the wings, ready to strike when the market is hot.

And temperatures are rising, albeit slowly.

A total of 22 IPOs have been launched so far in 2010, while 17 have been cut, postponed or canceled because of uncertainty. Not a single, significant green technology IPO has debuted this year, though most analysts say they are cautiously optimistic.

"The last two weeks it (the general IPO market) has improved and that may induce some of the more speculative companies, such as those in greentech, to file," said Scott Sweet, senior managing partner of IPO Boutique.

"There will be more filings this year, but no way is the quality out there yet," he added about the clean-tech sector.

The performance of recent IPOs show how investors are playing it safe and rewarding established businesses. They have so far not bet on companies without proven track records.

Recent winners in the market include broadband chipmaker MaxLinear Inc, a profitable company with high growth potential, and telecom equipment maker Calix Networks Inc, which has a weaker balance sheet but a chief executive with a record of selling companies to technology giants like Cisco Systems Inc.

MaxLinear shares soared nearly 34 percent, while Calix shares rose 16 percent in Wednesday's debut.

On the flip side, shares of shipping company Crude Carriers Corp, which does not own any ships yet, fell 2.3 percent when it debuted earlier this month, even after the IPO was priced at the bottom of the expected range.

And China Hydroelectric, which operates hydropower plants in China and was one of the small green technology companies to launch an IPO this year, saw its stock close down 15 percent from the IPO price on its first day of trading.

Even lithium-ion battery maker A123 Systems, which had a smash-hit IPO last September, has been battered and is now trading below its IPO price, as it was hurt when key customer Chrysler scaled back its electric vehicle plans.

PICKY MARKET, DISCERNING INVESTORS

All eyes are on the few high-profile green technology companies -- including Solyndra, Tesla Motors, Codexis and Silver Spring Network, a smart grid network company that is expected to file a registration statement this year.

Their public performance will likely set the tone for the sector, analysts say, creating either a boom or bust scenario.

"Investors are being picky, the market is picky," said Doug Chu, senior vice president for NYSE Euronext, who oversees the exchange's Silicon Valley office.

"A lot of stronger companies, those that are profitable and don't need to go public right now, have been sitting on the sidelines," he said, adding that a few strong IPO debuts will prompt these companies to also test the market.

Sweet, with IPO Boutique, said that of the greentech companies close to launching, Silver Spring is the best positioned and would most likely receive the warmest welcome.

He saw Tesla and Solyndra as close too, but not as much of a guarantee for investors as Silver Spring.

The key driver for a clean-tech boom is a stable or improving stock market, said Jeff Lipton, managing director and head of North American cleantech investment banking for Jeffries & Co.

"I would think that if the markets remain relatively stable -- they don't have to be on fire, but if they stay where they are -- you could easily see six to a dozen IPOs this year," he said. "And if the market really heats up in the second half, that pace could accelerate."

(Additional reporting by Matt Daily in New York; Editing by Richard Chang)