SolarCity shares shine after panel installation forecast
Oct 11 (Reuters) - Shares of SolarCity Corp rose as much as 24 percent after the U.S. solar panel installer said it expects to boost its installation capacity by at least 70 percent next year as home solar power gains greater acceptance in the country.
California-based SolarCity expects to install 475-525 megawatts (MW) of solar panels in 2014, up from the deployment outlook of 278 MW for this year.
The company, which went public in December, has grown rapidly due to a business model that allows homeowners to lease solar panels, eliminating the need for a large upfront investment to lower power bills.
"Leasing is the reason why we expect the high growth within the U.S. solar market to come more so from the residential side than the large scale projects you have seen in the recent years," said S&P Capital IQ analyst Angelo Zino.
SolarCity, backed by entrepreneur and Tesla Motors CEO Elon Musk, said on Wednesday it would acquire Zep Solar, a maker of mounting systems for residential solar panels, to cut installation time. It also recently bought direct marketing company Paramount Solar.
For the third quarter ended September, SolarCity said it deployed 78 MW of solar panels, exceeding its own estimates of 70-77 MW.
"It gives investors the confidence that the high growth environment for the company will remain intact in 2014 and beyond that," S&P Capital's Zino said.
There was a massive short squeeze in SolarCity.
"This stock is heavily shorted with a short-to-float ratio of almost 26 percent as of Sept. 13," said WhatsTrading.com options strategist Frederic Ruffy. Shares are now up over 285 percent year-to-date.
On the options front, overall volume on SolarCity is 3.9 times the recent daily average with 40,000 calls and 12,000 puts traded by 11:14 a.m. ET, according to options analytics firm Trade Alert.
Much of the activity is in weekly calls that expire after the close on Friday, Ruffy said.
The company's shares were up 22 percent at $46.77 in midday trading. Nearly 12 million shares changed hands.
(Reporting by Garima Goel in Bangalore, additional reporting by Doris Frankel in Chicago; Editing by Maju Samuel)