We have recently noted how the solar sector is not just in a bad place… It is in jeopardy. This last Sunday was Earth Day but please do not bother telling that to investors. Investors have lost billions and billions of dollars in the alternative energy sector, with the lion share of that coming from individual solar companies that are U.S.-based or which are based in China. First Solar, Inc. (NASDAQ: FSLR) might have recently announced a restructuring but this is a moot point at this issue. Earth Day did not help the other major alternative energy players either.
First Solar, Inc. (NASDAQ: FSLR) would now effectively be considered a broken IPO if this price was retroacted back to its IPO price. Maxim is late on its call with a SELL rating, but all you have to do is look at the objective price target to guess why this is so bad: it is calling for $9 per share and it leaves room for it to go lower. Today marks an ALL-TIME LOW!!!!!
LDK Solar Co., Ltd. (NYSE: LDK) is one you have to ‘love’ when it is likely one of the Chinese solar panel dumpers in America and elsewhere. Its ADRs are down 9.6% late-day at $2.94 on above-average volume. The 52-week low here is $2.55.
Suntech Power Holdings Co. Ltd. (NYSE: STP) is in the same LDK boat today with a 7% drop on light volume to $2.43 against a 52-week low of $1.70.
SunPower Corporation (NASDAQ: SPWR) is down 2.6% more at $5.36 and its 52-week low is $4.94. Total probably either better think of how to cover its tracks here for that $1 billion (and then some) majority stake acquisition. It either better write down its value or it better consider buying the rest at about half-price.
With the losses realized in the alternative energy sector investments (not including valuation write-downs) this is a sad but fair question to ask… Can the world afford Earth Day?
Part of the issue is not just dumping. It is austerity measures. Governments have supported alternative energy endlessly. That trend has started to come to an end and ultimately this sector is going to have to learn to survive and thrive without subsidies And without government loan guarantees. It is a bad spot to be in when you rely on government hand-outs to survive when governments can no longer afford to keep handing that money out.
JON C. OGG