Thursday, October 27, 2011

First Solar Fiasco: For Investors Only 1 Question Matters (FSLR)

In late pre-market trade the stock is tacking on another $2.54 (5.51%) at $48.65.
Eric Rosenbaum is one of the best writers on the energy/alt-energy beat.
From TheStreet:
First Solar(FSLR_) is down 25% one day -- the largest one-day drop in its history -- and up by as much as 15% the next, but for any investor who hopes to understand the future of the solar sector, neither Tuesday's First Solar share collapse or Wednesday's rebound makes one bit of difference in the end.

First Solar shares may yet go lower than they are after Wednesday's rally, and even lower still than after Tuesday's historic collapse. And there is only question that matters for investors, that is, investors who think in more than flash-trading intervals, because for day traders and the HFT terminals, the volatility and mercenary, millisecond profit opportunities will continue: What is the earnings power of First Solar in 2013?
That's it. It's really that simple.

That's not to say there aren't a million questions to ask -- for which the company won't provide any clear answers -- based on the fiasco of the past 24 hours during which the company ousted its CEO in a rare intraday press release, said it would announce third-quarter results on Nov. 3, and then reported the results -- without details -- on Wednesday morning. On this one, First Solar looks like it didn't have a clue how to run a corporation to reduce market volatility, even though it said the past 24 hours show it's getting its house in order.

The financial guidance from First Solar was significantly below Wall Street expectations -- though to be fair, any Street analyst who was significantly higher with their model than First Solar's new guidance had his head in the sand.

After disposing of its CEO Rob Gillette, First Solar announced that it earned $2.25 a share in the third quarter, below the Wall Street consensus of $2.64. The solar company reduced its full-year guidance to $6.50 to $7.50 a share, down from $9 to $9.50....MUCH MORE

Oct. 26
First Solar Analyst Roundup (FSLR)
First Solar Cuts Profit Forecast, Spending Plans; Possible Reason for CEO's Departure (FSLR)

Oct. 25
"First Solar: It’s the Mystery That Makes It Taste So Bad" (FSLR)
Who Got Stuck Holding First Solar? (FSLR)
Al Gore, No Score!: GIM Stuck with 959,075 First Solar Shares (FSLR)
A Huge Score For Jim Chanos and the First Solar Shorts (FSLR)
What the?...First Solar CEO Out; Replaced by Chair Ahern (FSLR)

And, just for grins and giggles, three from the last month:
Selective Financial Disclosure? First Solar May Have Violated Reg FD (FSLR)
Disclosure is sort of the entire reason for the '33 Act, much less Reg FD.
In late pre-market trade the stock is at $65.50 down another $1.35.... 
Goldman Sachs Reiterates Buy on First Solar, Cuts Price Target From $150 to $90 (FSLR)
Analysts Defend First Solar (at new, lower prices) FSLR