Friday, February 10, 2012

First Solar: Big DOE Loan Issue; Analyst Cuts Rating (FSLR)

Eric Savitz set the standard for financial blogging when he ran Barron's Tech Trader Daily.
During earnings season he would post 20 to 30 times per day, adding color and/or perspective to the flood of numbers coming out of silicon Valley. He's definitely one of the good journo's doing the blogging thing.
He's moved on to Forbes, Tiernan Ray is at TTG's helm and things are popping in the Valley.*
From Forbes:
First Solar shares are down sharply on news that the Department of Energy has delayed funding a $646 million federal loan for the Antelope Valley Solar Ranch project the company is building in northern Los Angeles County, California, for Exelon. The loan delay is apparently due to a “construction permit issue.”

First Solar noted in the 8-K filing yesterday disclosing the issue that failure for the loan to fund by February 24 could require First Solar to buyback the project from Exelon for the price they originally paid – about $75 million – plus certain other costs incurred by Exelon.

If First Solar were to repurchase the project, the company said, “the reacquired project would then become available for sale by First Solar to another party.” The company said that current cash and other capital resources would be enough to fund the purchase if required, while meeting First Solar’s working capital and capital expenditure needs.

As my colleague Todd Woody noted in a blog post, this is just the latest in a series of green tech companies that has been tripped up by Department of Energy funding issues.
Collins Stewart analyst Dan Ries this morning responded to the news by cutting his rating on First Solar to Neutral from Buy. Ries notes that the situation could wipe out the company’s Q1 profits....MORE
*Yes I know FSLR is headquartered in Arizona not Cali.
The stock is down 9.15% at $44.54.