Solyndra’s huge Department of Energy loan implosion was painful enough at about $500 million. Most investors do not really focus on the notion that First Solar has a large amount of Department of Energy loans. First Solar ended the most recent quarter with cash and marketable securities of $788 million.
Getting a live tally on all of the Department of Energy loan guarantees is a bit murky, but as of last June it was put around $4.5 billion to First Solar alone. That figure does include a current project, which is being sold. Sadly, shares were up around $140 at that time.
UBS has cut the price target to $40 on First Solar, while Citigroup cut the target down to $45. LAst night came a report from Gordon Johnson of Axiom Capital on CNBC calling for this to remain a SELL with the potentiality of a total write-off being possible as the company will start to lose money next year. The most extreme call is for a potential bankruptcy down the road, something we hope does not turn out to be the case.
If First Solar goes under, Solyndra could end up looking a small drop in the bucket. This is not a situation that will be front and center today nor will it be in the coming weeks. This is a longer-term concern, but still a valid concern.
The Guggenheim Solar ETF (NYSE: TAN) is down only 2.1% at $29.65 against an adjusted 52-week range of $24.20 to $89.00. The PowerShares WilderHill Clean Energy (NYSE: PBW) ETF is down only 1.7% at $5.86 against a 52-week range of $4.80 to $10.88. Frankly, it is surprising that these are not down worse.
First Solar shares are now down 9.8% at $32.80 and the volume of 5.6 million shares at 10:25 AM EST already has passed the average daily volume of 4.7 million shares.
JON C. OGG
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