Inverters for Sale—Going Fast

One of my all-time favorite renewable energy stocks, Xantrex, is going away. Schneider Electric, a French company, is buying it at a 55% premium over market price. The reason for selling out, according to Xantrex chairman Mossadeq Umadally, is that it needs to build a vastly larger sales and marketing department. Borrowing Schneider’s, he says, is cheaper and faster than building one from scratch.

Another reason, of course, is that Ummadally—and other insiders—are ready to cash out. That’s a much more likely prime motivator than any “business� reason. The company has reached profitability and is on the top of its game—what a great time to sell.

So should shareholders rejoice, or should they upchuck on their charts? How about neither. A 55% premium is pretty good for a company that makes power boxes, although given a few more years of solar growth, the company’s stock price surely would have increased by more than that. One thing to watch is an exodus of skilled engineers launching their own startups in British Columbia. Now is the right time for new ideas and for cashing in your stock options.