IFR International - 28.07.2018

„ FRONT STORY US IPOS

Bloom Energy sees boom times after IPO

Fuel cell maker defies odds with explosive debut

As a private company BLOOM ENERGY has gone
from high-growth disruptor to uneconomic
PARIAHûUNABLEûTOûSCALEûPROlTABLYû)TSû
53Mû)0/ûANDûHOTûAFTERMARKETûSHOWEDû
THEREûAREûMANYûINVESTORSûWHOûTHINKûITûMAYû
REVERTûTOûITSûEARLIERûSTATUS
Bloom, whose venture capital roots date
BACKûTOû ûEXPLODEDûONTOûTHEûPUBLICû
EQUITYûMARKETS ûSOARINGûûONûDEBUT ûANDû
DEFYINGûEXPECTATIONSûOFûUNDERWRITINGûBANKS
h)ûDIDNTûHAVEû53ûPENCILLEDûIN vûSAIDûONEû
BANKERûINVOLVEDûINûTHEûUNDERWRITINGûSYNDICATEû
when shares were trading around that level at
MIDDAYûONû7EDNESDAY ûTHEûlRSTûDAYûOFûTRADINGû
4HEûSTOCKûCLOSEDûTHEûlRSTûDAYûATû53
Bloom climbed rapidly through the day
FROMûAûLOWûOFû53û
ûVERSUSû53û
PRICINGû
ûANDûPEAKEDûATûTHEû53ûCLOSE
JP Morgan and Morgan Stanley, the actives of
lVEûBOOKRUNNERS ûPLACEDûMûSHARESûTHEû
NIGHTûBEFOREûATû53 ûTHEûHIGHûENDûOFûAû
53nûMARKETINGûRANGE ûTOûVALUEû"LOOMû
ATû53BN
4HEYûWEREûSIXûTIMESûOVERSUBSCRIBED ûTHOUGHû
DEMANDûWASûINmATEDûBYû53MûINVESTEDûBYû
EXISTINGûSHAREHOLDERSûANDûANOTHERû53Mû
HELDûBACKûFORûEXECUTIVESûANDûEMPLOYEES
h4HEûBOOKûINCLUDEDûGOODûANCHORSûTHATû
should be with the company for a long
TIME vûSAIDûTHEûBANKERûh)ûDONTûWANTûTOû
discount the importance of a forward
valuation, but it became a question of
WHETHERûYOUûBELIEVEDûORûNOTv
“This company has the potential to be much,
MUCHûLARGERûAûYEAR ûTWO ûTHREEûFROMûNOWv
Bloom and the potential for fuel cells -

used in the Apollo space missions - split

INVESTORSûINTOûVISIONARIESûANDûSCEPTICS

"LOOMSûlNANCIALûRESULTSûWEREûPARTICULARLYû

problematic, a point management willingly

ACKNOWLEDGEDûh7HENû)ûTHINKûABOUTûTHEû

HISTORICALûlNANCIALSû)ûTHINKûCOMPLICATEDvû

SAIDû"LOOMû#&/û2ANDYû&URRûONûTHEûONLINEû

ROADSHOWûPRESENTATION

He advised investors to focus on results

BEGINNINGûINûûONûAûGO

FORWARDûBASIS

DISTRIBUTED FINANCES

"LOOMûGENERATEDûAû53MûOPERATINGûPROlTû

INûTHEûlRSTûQUARTERûONûREVENUEûOFû53Mû

AFTERûLOSINGû53MûANDûPOSTINGûREVENUEûOFû

53MûINûTHEûCOMPARABLEûQUARTERûINû

4HEûRESULTSûWEREûNOTûCOMPARABLEûATûALL

"LOOMûDELIVEREDûûOFûITSû

KILOWATTû

FUELûSTACKSûINûTHEûRECENTûQUARTERûVERSUSûûAû

YEARûAGOûnûTHEûNUMBERûOFûFUELûCELLûSTACKSûSOLDû

GREWûBYûABOUTûûBUTûREVENUEûGREWûATûAû

ûCLIPûYEAR

ON

YEAR

The reason for the disparity related to

ONE

TIMEûTAXûCREDITûBENElTSûANDûCHANGESûINû

HOWûITûBOOKSûPRODUCTûSALES

"LOOMûHISTORICALLYûBENElTEDûFROMûAû

FEDERALûINVESTMENTûTAXûCREDITû)4#  ûWHICHû

PROVIDEDûCUSTOMERSûWITHûAûTAXûCREDITûWORTHû

53ûPERûKILOWATTûHOURûORûûOFûTHEû

COSTSûOFûAûFUELûSTACKû!FTERûTHEûTAXûBENElTSû

LAPSEDûATûTHEûENDûOFûûTHEûCOMPANYû

RESPONDEDûBYûLOWERINGûTHEûSELLINGûPRICE

)Nû&EBRUARYûHOWEVERûTHEû53ûGOVERNMENTû

REINSTATEDû)4#SûRETROACTIVEûTOûTHEûBEGINNINGûOFû

ûPROVIDINGû"LOOMûWITHûAûONE

TIMEû

53MûREVENUEûBENElTûINûTHEûlRSTûQUARTER

!TûTHEûBEGINNINGûOFûû"LOOMûALSOû

BEGANûRECOGNISINGûhTHEûVASTûMAJORITYvûOFû

revenue from product sales upfront, rather

THANûOVERûTHEûLIFEûOFûAûCONTRACTûnûûOFû

ACCEPTANCESûINûTHEûlRSTûQUARTERûOFûûWEREû

BOOKEDûASûREVENUEûVERSUSûJUSTûûINûlRSTû

QUARTERû

2EGARDLESSûOFûACCOUNTINGû"LOOMûCANûONLYû

BEûPROlTABLEûIFûFUELûCELLSûAREûCOMPETITIVEûTOû

TRADITIONALûPOWER

#OSTSûHAVEûDROPPEDûFROMûABOVEû53û

PERûKILOWATTûSEVERALûYEARSûAGOûTOû53ûINû

THEûlRSTûQUARTERû&UELûCELLSûNOWûLASTûOVERûlVEû

YEARSûVERSUSûJUSTûûTOûûMONTHSûONûITSû

EARLIERûTECHNOLOGIES

%FlCIENCIESûANDûDURABILITYûHAVEûLOWEREDûTHEû

COSTSûOFûFUELûCELLSûTOûûCENTSûPERûKILOWATTû

HOURûVERSUSûûCENTSûFORûTRADITIONALûPOWERû

MANAGEMENTûEXPLAINEDûONûTHEûROADSHOW

"LOOMSûPLANûNOWûISûTOûBREAKûEVENûONûTHEû

COSTSûOFûINSTALLATIONûPASSûTHROUGHûFUELûNATURALû

GAS ûCOSTSûONTOûCUSTOMERSûANDûEARNûAûSMALLûCUTû

FROMûONGOINGûSERVICINGûANDûMAINTENANCE

"LOOMûHASûJUSTûûMEGAWATTSûOFûITSûFUELû

cell arrays installed, comparable to a large

SOLARûORûWINDûFARM

"LOOMûFAMOUSLYûLANDEDû53MûINûAû

3ERIESû"ûROUNDûWAYûBACKûINûûTHATû

included participation from New Enterprise

!SSOCIATESûANDû+LEINERû0ERKINS

!SûPARTûOFûTHEû)0/û"LOOMûWASûABLEûTOûmUSHû

53MûOFûANûû#"ûTHATûWASûTOûMATUREûINû

$ECEMBERûINTOûMûSHARESû(OLDERSû

CONVERTEDûATûAûPRICEûOFû53ûPERûSHAREû

ORûAû53BNûVALUATION

Stephen Lacey

Spartan approach to SPAC

Interim Apollo management will find target

!POLLOû'LOBALûISûGOINGûhHEADLESSvûONûITSû
DEBUTû30!#
4HEûPRIVATEûEQUITYûGIANTûlLEDûDOCUMENTSû
ONû-ONDAYûFORûAû53Mû)0/ûOFû30!#û
SPARTAN ENERGY ACQUISITION that outlined Apollo
PARTNERû'EOFFREYû3TRONGûASûINTERIMû#%/
Apollo natural resources head James
#ROSSENûISûINTERIMû#&/ ûWITHûAûPERMANENTû
management team to be selected after the
ACQUISITION

While other vehicles have had similar

ARRANGEMENTSûENERGY

FOCUSEDû30!#SûTENDûTOû

GOûPUBLICûWITHûAûWELL

KNOWNûCHIEFûEXECUTIVEû

TOûLEADûTHEûSEARCH

“This gives them breadth of opportunity to

PLUGûTHEûRIGHTûJOCKEYûONTOûTHEûRIGHTûHORSEvûSAIDû

ONEûINVESTMENTûBANKERûh4HEREûAREûOPPORTUNITIESû

ANDûmEXIBILITYûACROSSûAûSUITEûOFûEXECUTIVESv

Those appointments could come from the

!POLLOûSTABLEûAûTARGETûORûELSEWHERE

Apollo has committed to invest up to

53MûONûAûBACK

ENDûACQUISITIONû4HISû

ISûONûTOPûOFûTHEûMûFOUNDERûSHARESû

PURCHASEDûFORû53ûTHATûGIVEûITûANû

INITIALûûSTAKEûASûWELLûASûMûOFûhAT

RISKvûWARRANTSûFORû53MûTHATûWOULDûBEû

lost if an acquisition is not

CONSUMMATED

The public offering comprises 40m units

with each unit structured as one share and

ONE

THIRDûOFûAûWARRANTûEXERCISABLEûATû

53ûPERûFULLûWARRANT

Apollo noted that it has invested

53BNûACROSSûûNATURALûRESOURCE

RELATEDû

INVESTMENTSûDATINGûBACKûTOû

Stephen Lacey

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