Investing in Vivint Solar (NASDAQ:VSLR)

What the Experts Say about Vivint Solar (NASDAQ:VSLR)

Written by Brian Hicks
Posted October 6, 2014

vivUgh...

Solar stocks are getting pounded harder than Marvis Frazier's face during his 30-second fight against Mike Tyson in 1986.

  • SPWR – down 1.46%
  • FSLR – down 2.29%
  • TSL – down 4.28%
  • YGE – down 2.88%
  • SUNE – down 2.47%
  • SCTY – down 2.14%
  • CSIQ – down 2.15%

And Vivint Solar (NASDAQ:VSLR), the much-hyped solar IPO has fallen 14 percent since it debuted last week.

Interestingly, this is a company that many claimed would knock competitor SolarCity off its throne. Never mind the fact that the two are completely different animals altogether.

Although I didn't run to grab shares of VSLR, and haven't been particularly excited about doing so, I do like the possibilities of grabbing some cheaper shares. Especially now that all the enthusiasm on Wall Street has turned to a bunch of bearish rhetoric.

Two weeks ago, all I read was how VSLR was going to make early investors rich while swiping business from SCTY. Now, all I'm reading about is the myriad of obstacles VSLR faces. Blah, blah, blah.

The truth is, for investors, there really are no “experts.” There's just a bunch of smart people who make educated guesses. And sometimes they're not even all that educated.

The Proverbial Middle Finger

In regards to VSLR, I read a piece today that read:

“Vivint Solar’s business model might have been a cause of concern for potential investors. Some experts believe business models of the solar installers’ lease or purchasing power agreements (PPAs) to be faulty.”

And which experts believe this?

I'm not saying that in theory, some of these lease agreements are particularly in favor of the consumer. But it'll be years before most folks even understand the advantages of buying a system outright instead of doing a lease deal. And even then, it might not matter. After all, not everyone goes solar because of the cost benefits. Some people just want to give the proverbial middle finger to the fossil fuel industry.

Whatever the reason, the leasing model is doing very well, and I suspect it will continue to do very well for years to come. Remember, not everyone spends their days reading about the latest photovoltaic efficiency gains. And most people don't care.

In the meantime, I'm keeping my options open with VSLR. While I don't think it's any immediate threat to the likes of SCTY, I do see opportunity. But I'm not interested in buying that opportunity for any more than $11 a share.