Key Buffalo Billion investment SolarCity loses more than 25% of stock value
Its manufacturing center, still under construction, represents one of the most significant investments under New York State's "Buffalo Billion." But renewable energy company SolarCity's stock value plummeted more than 29 percent Wednesday, and has lost nearly half its value since the start of 2016.
SolarCity stock began a sharp decline after the company revealed Tuesday that it fell short of its installation goals in fourth-quarter 2015 and ceased installations in Nevada after regulators there withdrew incentives.
At the close of trading Wednesday on the NASDAQ Exchange, SolarCity's stock value dropped 29.3 percent from Tuesday's closing price of $26.35 per share.
The stock value has fallen an estimated 48 percent since January 1.
Officials are downplaying SolarCity's falling stock value, insisting that recent market activity will not halt the ambitious development happening in Buffalo's Riverbend neighborhood. It is projected to create 1,500 jobs inside the factory, when operational, and an additional 1,500 jobs in business supporting the company's solar panel manufacturing, distribution and installation.
"We've been assured by the administration that the turbulence that we are seeing in the stock market right now doesn't affect the larger project down the road," said State Senator Tim Kennedy, whose district includes Riverbend. "And we haven't heard anything otherwise to suggest SolarCity is changing or considering changing its intentions."
Solar City is just one of Musk's companies taking a beating on Wall Street. Tesla Motors, the electric car maker, has lost about 37 percent of its value. Shares closed 2015 at a value of $240.01. Late Wednesday, shares were trading around $144 each.
Musk's companies, notes a local financial planner, are speculative. That includes SolarCity, which has a business plan that includes long-term leasing of its solar panels to customers. It's a plan that has many on Wall Street feeling cool towards SolarCity.
"It is speculative and is burning through cash at a very high rate," said Tony Ogorek of Ogorek Wealth Management, based in Williamsville. "Really what the Street is saying about its business model - it isn't necessarily a knock on solar, because we all think that's going to be a coming technology - but it's the business model that (SolarCity) has embraced that I think the Street has a concern about."
Meanwhile, news reports Wednesday indicated that full production at SolarCity's Buffalo factory will be delayed by up to six months. Company officials are saying that equipment needed to begin solar panel production won't be in place as soon as hoped.