By Jennifer Kho

Trina Solar shares rose 44.6 percent Tuesday after its IPO on the New York Stock Exchange, then fell 24.2 percent in recent trading.

“The stock made quite a circle,” said Jesse Pichel, a vice president and senior research analyst for Piper Jaffray.

The Chinese solar company makes traditional crystalline solar ingots, wafers, and modules. It is “vertically integrated,” meaning that it handles much of the value chain itself. But it relies on the same polysilicon as some 93 percent of the rest of the industry, and polysilicon is a raw material in the midst of a worldwide shortage.

Concerns about access to polysilicon, as well as concerns about future margins, led to the roller coaster, Mr. Pichel said.

Trina set its share price in the $13.50 to $15.50 price range Monday, but priced 5.3 million shares at $18.50 for the IPO, raising $98.05 million. The stock opened at $26 and peaked at $26.75 before closing at $20.28.

Analysts expressed mixed reactions to the performance, leading to different conclusions about what it means for the solar industry.

Mr. Pichel said investors bought the stock, at first, because it was priced cheaper than other solar companies, but flipped the stock as prices rose because they were unsure about long-term prospects.

For instance, Piper Jaffray believes margins will shrink for many solar companies as prices decline, he said.

“There are a number of companies coming public in China, and the market is kind of scratching their heads, wondering if this is the beginning of the end—and by the end, I mean margin compression,” he said. “It’s hard to differentiate some of these companies. Additionally, the market’s wondering where many of these newcomers get their polysilicon."

Jenny Chase, a senior analyst in solar with research firm New Energy Finance, said Trina’s IPO was “quite positive,” with a 9.6 percent rise from the original asking price.

“Cheap labor and government support: that’s why investors are going for the Chinese solar companies, with relatively boring technology compared to First Solar,” she said, referring to the November IPO of an Arizona-based company developing a thin solar technology using cadmium telluride.

Mark Cox, CEO of the New Energy Fund hedge fund, said the stock dip suggests some solar fatigue.

“My sense is that it was overvalued, and that’s what the market thought as well,” he said. “I think there are doubts about Chinese panel quality, as well as issues about panel margins. I’d say we’re in a flat overall market because of the shortage of silicon and things. Definitely, lower gasoline prices [are also having an effect.]”

Whatever the stock does next, other Chinese solar companies planning to file IPOs will be watching closely and taking notes.

Solarfun Power Holdings, for instance, plans to debut on the Nasdaq on Wednesday, offering 12 million shares in an estimated $11.50 to $13.50 price range. Other anticipated Chinese solar IPOs include Yingli Solar, LDK Solar, and CEEG Nanjing PV-tech.

All of them are planning “incredibly ambitious” expansion plans, even though some of the factories they already have might not be running at full capacity, and could potentially undercut Western companies with lower costs, Ms. Chase said.

She said she is unsure why investors chose to place their money on Trina Solar rather than waiting for Yingli, which has more contracts with European companies, but that the timing could be one reason.

Trina probably is getting “a big advantage” by coming out earlier than some of the other Chinese solar companies, she said.

“The market is declining a little bit in how favorable it is for solar companies—it went a little bit crazy at the end of 2005—and it’s hard to see all of them [the Chinese solar IPOs] being very successful,” she said. “Then again, New Energy Finance has been saying that solar energy has been overvalued for quite a while, and we haven’t seen a real correction yet, so maybe we’re wrong.”

Ms. Chase said she was surprised that Trina Solar managed to IPO so quickly. Just a few months ago, the company told New Energy Finance it was planning an IPO in early 2007, she said.

And in July, Trina announced it raised $40 million from an investor consortium led by Milestone Capital, Merrill Lynch, and Good Energies Investments.

“It’s not entirely clear why these Chinese solar companies secure private-equity rounds then go straight to market,” Ms. Chase said. “It’s a trend we can see, but we don’t know why it’s happening.”

It’s hard to find clear lessons from the Chinese solar IPOs that have happened so far this year.

In contrast to Suntech Power, which saw shares jump 41 percent in its oversubscribed debut and continue to grow, China-based Canadian Solar has watched its shares decline from their original $15-per-share price, at its IPO in November, to $9.70 in recent trading.

But shares for ReneSola, which debuted on the London AIM in August, grew from less than £1 to £4.03 today.

Mr. Cox said the lesson for Chinese solar companies is to keep prices low. Suntech Power and ReneSola were priced low, and did well, while Canadian Solar and Trina were priced too high—with Trina pricing above the expected range, he said.

But not all Chinese solar companies should be valued low, said Mr. Pichel.

“There are important and differentiated companies in China,” he said, adding that investors should focus on companies with a technology or process advantage, as well as on companies with a “sustainable supply chain advantage,” such as a relationship or common ownership with a wafer manufacturer.