Stimulus funds helped some stocks soar
— -- As Congress and the White House launch investigations into renewable-energy loan guarantees made to companies such as Solyndra under the 2009 stimulus bill and related legislation, a USA TODAY analysis shows that a series of public companies that got help have soundly beaten the stock market and most venture-capital funds raised in 2008.
With debate raging in Washington about whether government can effectively pick winners and losers in a fast-changing economy, the data shed light on how well the Obama administration did the two major jobs that venture capital performs in a high-tech economy — helping investors make money and bringing new technology to market. Skeptics have pointed to former Obama economics adviser Lawrence Summers' comment in a 2009 e-mail that "government is a crappy VC" to argue that the $787 billion stimulus measure was packed with waste.
About $100 billion of stimulus funding was earmarked for technology spending, according to tech consulting firm International Data Corp. Two-thirds was for energy technology, and most of the rest will subsidize doctors' adoption of electronic medical-records (EMR) software. At USA TODAY's request, IDC identified major beneficiaries of that spending to examine whether the money helped companies grow and bring technologies to market.
The analysis covered more than 45 companies that are public or have registered for initial public offerings, including most leading makers of electronic medical-records software and electric cars, and a small selection of the 5,000-plus companies and local government agencies that got clean-energy stimulus grants. Separately, USA TODAY looked at the recipients of all 38 completed or pending loan guarantees under the Energy Department's three major financing programs, including well-known public companies such as Ford, Southern Cos. and NRG, not on IDC's list. In all, the included companies, or their customers, are to receive more than two-thirds of the technology funding.
So far, the legislation has sparked adoption of electronic medical-records software and nurtured an electric-car industry that will sell at least 20,000 cars this year. At least 19 companies have gone public or filed for IPOs after getting stimulus money, from Solazyme's $21.8 million grant to build a pilot biofuels refinery to a $1.6 billion loan guarantee letting BrightSource Energy build the world's biggest solar-generation plant of its kind, according to securities-disclosure filings.
The stimulus has helped spark an 82% gain in the stocks of 11 health care technology companies since President Obama took office and a 263% gain in the three public companies that took $7.8 billion of federal financing to build next-generation vehicle factories. It contributed to a 79% jump in stocks of the four leading energy-efficiency companies identified by IDC, including diversified companies such as Johnson Controls and Honeywell. Companies involved in developing smart electric grids, nine big tech firms that are also in many other businesses, have risen 54%.
Related Stories
ABC News Live