Today: San Mateo solar-panel installer SolarCity hopes to buck the trend of lackluster greentech performances on Wall Street. Plus, Apple (AAPL) reportedly expects its smaller iPad to be a huge hit, and Netflix (NFLX) shares soar as Amazon is seen as less of a threat.
SolarCity files for $201 million IPO
San Mateo-based solar panel installer SolarCity filed for an initial public offering Friday, hoping to become one of this year's rare greentech success stories on Wall Street.
The filing hopes to raise up to $201 million, and the company will be traded on the Nasdaq exchange.
It's been rough going for green energy companies over the past year, as cheap, Chinese-made solar panels have flooded the market, dragging down profits for U.S. solar-panel manufacturers. Those cheap prices have increased consumer demand though, and as an installer, SolarCity has undergone rapid growth with a program that lets customers lease their rooftop solar panels. It is the nation's largest solar-panel installer, with more than 31,000 customers as of June, according to the company. Revenue soared from $20.3 million in June
But despite its growing customer base, SolarCity may have a difficult time winning over Wall Street in the wake of weak performances by solar stocks this year and last spring's aborted IPOs of greentech companies BrightSource of Oakland and Colorado-based Luca Technologies. "Solar investors are very pessimistic, so it's going to be a tough market to come out in," analyst Mark Bachman told Reuters.
The company greatly benefits from federal tax credits, and has raked in $1.57 billion from investment funds with backers such as Google (GOOG), US Bancorp and PG&E. But a note in SolarCity's S-1 filing may raise a red flag: It revealed two of its investment funds are currently being audited by the IRS, part of a wider investigation into whether solar companies are overstating the value of the panels they receive tax credits for.
"We are not aware of, and have not been made aware of, any specific allegations of misconduct or misrepresentation by us or our officers, directors or employees, and no such assertions have been made by the Inspector General or the Department of Justice," SolarCity stated in its filing. "However, if at the conclusion of the investigation the Inspector General concludes that misrepresentations were made, the Department of Justice could decide to bring a civil action to recover amounts it believes were improperly paid to us."
10 million Apple iPad Minis reportedly in the works
Apple hasn't even announced its so-called iPad Mini yet, but it's already counting on it to be a massive hit, according to a new report.
The Wall Street Journal reported Apple's Asian component suppliers have orders to make 10 million of the smaller tablets for the fourth quarter. That's about double the number of fourth-quarter orders for its main rival, Amazon's Kindle Fire, those sources told the Journal.
But fulfilling those orders may be tough; Topeka Capital analyst Brian White has said the complexities of building the smaller tablet may hamper its production. "The new 'iPad Mini' is more challenging to produce than prior iPad iterations," White said, according to a report in All Things D. "We believe supply will initially be constrained."
RBC Capital Markets analyst Amit Daryanani said Monday he expects 8 million of the devices to be sold in the fourth quarter, according to a report by Apple Insider. That's on top of the 21.6 million regular-sized iPad sales forecast, pushing holiday sales of the entire iPad line to around 30 million.
Last week, the Journal reported that mass production of the device's 7.85-inch display were already under way at two Asian suppliers, and other sources have said media invitations are expected Wednesday for a formal unveiling of the device Oct. 17.
The smaller iPad is also expected to carry a smaller price tag, to better compete with the Kindle Fire and Google's Nexus 7 tablet, which both start at $199.
Apple shares slipped Monday, down $14.42, or 2.21 percent, to $638.17.
Netflix soars after upgrade
Netflix shares surged Monday to their highest point since July after reveiving an upgrade from Morgan Stanley.
Stock in the Los Gatos-based streaming video and DVD-by-mail company jumped more than 10 percent, or $6.96, to close at $73.52, after Morgan Stanley analyst Scott Devitt upgraded its stock and said the threat to Netflix from Amazon's Prime Instant video streaming service was "overblown."
In a note to investors, Devitt said Amazon is unlikely to spend the money needed -- an estimated $1.2 billion -- to build a streaming video library as extensive as Netflix's, according to a report by Bloomberg News. Amazon currently offers more than 25,000 titles on its streaming service, while Netflix has more than 60,000. Devitt said Amazon's strategy is built more around driving customers to its tablets than building a standalone Netflix competitor. "Prime Instant Video is all about value investing —- finding good content at low prices and offering more incentive for consumers to buy a Kindle Fire," Devitt wrote.
That's more welcome news for Netflix. Last week, its share prices rose $12 after a report found Netflix customers were more satisfied with the service than they were earlier this year.
Netflix was one of Monday's few bright spots on Wall Street, as all three major indexes dipped as investors braced for expected bad news from the upcoming earnings season. The tech-heavy Nasdaq was the worst performer, falling 0.76 percent. Among Silicon Valley companies, San Francisco online gaming company Zynga continued its freefall after lowering its quarterly forecast last week, dropping 5 cents, or 2.02. percent, to $2.43. Menlo Park social networking giant Facebook, Zynga's major partner, was dragged down with it, dropping 51 cents, or 2.44 percent, to $20.40. Elsewhere, Google, Hewlett-Packard (HPQ) and eBay (EBAY) all fell more than 1.2 percent.
Silicon Valley tech stocks
The tech-heavy Nasdaq composite index: Down 23.84 , or 0.76 percent, to 3,112.35.
The blue chip Dow Jones industrial average: Down 26.50 or 0.19 percent, to 13.583.65.
And the widely watched Standard & Poor's 500 index: Down 5.05, or 0.35 percent, to 1,455.88.
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Follow Mike Murphy on Twitter at twitter.com/mmmmurf.