This paper presents partial results from research being conducted to understand the link between financial markets and sustainable energy development, with an emphasis on electricity. The research explores the process by which young sustainable energy technology companies execute initial public offerings on major stock markets worldwide. Space considerations limit this paper to analysis of key research questions for ten energy technology companies that were take public in the US between 1997 and 2000. Results are primarily descriptive. Future papers will discuss findings with respect to a broader range of research questions and for a larger sample group that cuts across multiple countries and provide additional underlying theory. In this paper we show that ten energy technology companies exhibit many characteristics common to initial public offerings. More importantly, we show that between 1997 and 2000 these ten energy technology companies alone raised almost $624 million in capital via initial public offerings, but that over $643 million was "left on the table." Finally we discuss the tendency for energy technology companies taken public to be relatively mature, float less than one-third of their total shares, finance pre-initial public offering growth with equity, use underwriters with the best reputations, incur offering expenses in line with industry norms, perform well in the short-term but not the long-term, and to be risky investments relative to a market benchmark. The small sample size restricts our ability to generalize beyond the group studied.

W.H. Moore, Rolf Wüstenhagen

7 Nov 2004