We have had nothing to do with these names for the last fifteen years or so.
It is hard enough to identify the class-of-the-field, in the case of the solars: FSLR, and wend our way through the vagaries of that one issue than to track the dreck (or eventual dreck).
From Wolf Street, January 23:
This is about stock market craziness, not about solar power.
This is about stock prices that get inflated beyond recognition on nothing but wild mania, and when the mania subsides, the stocks collapse and are inducted into our pantheon of Imploded Stocks. And we’re going to look at eight of these imploded solar stocks.
This is not about solar power. Rooftop and utility-scale solar installations are now a fairly large business. Utility-scale batteries have become a profitable way of arbitraging the highly volatile electricity spot prices that can spike during high-demand hours and plunge during low-demand hours, and in this arbitrage, batteries work well with big solar installations, buying electricity when the price is low, and selling when it’s high. And they work well with small-scale solar too. Some of the eight companies here are involved with both solar power and energy storage.
There are up-front costs with solar power, as there are with every power plant. But with solar, the “fuel” is free for the life of the installation, and the math has been getting better as the price of photovoltaic panels has come down over the years. In 2023, the share of electricity generated by small-scale and utility-scale solar installations rose to 5.6% of the total electricity generated in the US.
The eight companies here are sort of pure-plays in the solar-power field. Big utilities are all over solar power, as are big equipment providers, and of course, Tesla. But these eight companies here are specialized players, many of them with over 1,000 employees at the peak, and with hundreds of millions to several billion in annual revenues.
Globally, about 85% of the photovoltaic panels are manufactured in China, which is also its own biggest customer. Vietnam is #2 with a share of a little over 3%. There are some efforts underway to boost manufacturing of photovoltaic panels in the US, to not be so totally dependent on China. But that will take a while to pan out.
This is about stock market craziness, not about solar power.
SunPower has been around for a long time. It went public in 2005 as a spin-off from Cypress Semiconductor. It was one of the big boys at the time.
Its stock experienced two huge bubbles. The first in 2006-2007 when it went from $20 a share to $100. The second started in May 2020, when free money turned brains to mush, and the stock multiplied by 12, from $4 a share to $54 a share in about 18 months to peak in January 2021. Then it collapsed.
There was a mix of operational issues, years of substantial losses, accounting issues, missed filing deadlines, defaults, etc., etc. When it could no longer raise new cash to burn, after it had already burned everything it had, it was over.
In August 2024, SunPower filed for bankruptcy. Most of its assets were acquired by solar SPAC Complete Solaria for $45 million (more in a moment), and SunPower’s shares and investors got wiped out.
This stuff happens. What was crazy were the two spikes in share prices on nothing but mass-mania, and after it subsided, the stock collapsed to zero (data via YCharts).
Complete Solaria [CSLR], the residential solar systems provider that acquired SunPower’s assets for $45 million, had gone public via merger with a SPAC in July 2023, an amazing feat, given that the ignominious SPAC bubble had already collapsed. From the merger-share price of $10 a share, the stock has plunged by 81% to about $1.90 currently, including a slick rug-pull right after the SPAC merger was completed (data via YCharts).
SolarEdge Technologies [SEDG] makes inverters, batteries, power optimizers, and other equipment for solar systems. Back in 2015, when it went public via IPO, SolarEdge made a deal with Tesla Energy to provide inverters for Tesla’s Powerwall. But eventually, Tesla produced its own inverter.
The company, which is headquartered in Israel and is largely active in Europe, made several acquisitions: In 2018, it acquired a major stake in South Korean maker of battery cells and batteries, Kokam. In 2019, it acquired a majority stake in Italian EV powertrain manufacturer SMRE, and it acquired UPS maker Gamatronic. In 2023, it acquired UK-based software-as-a-service provider Hark Systems.
In prior years, the company booked some net income, but over the past five quarters, it booked massive losses, totaling $1.72 billion, including $1.2 billion in Q3. And sales collapsed in 2024, including by 65% in Q3 2024.
he stock price had multiplied by 10 between early 2019 ($36 a share) and January 2021 ($360 a share), then plunged and spiked a few more times within the same range, before the big kathoomph in the second half of 2023. The stock has now plunged by 96% from the triple peaks in 2021 and 2022:
Sunrun [RUN] makes and installs residential solar systems that it sells as a subscription or financed purchase. The company, which is based in San Francisco, went public via IPO in 2015. There had been some profitable years, but over the past five quarters, it lost $1.45 billion.
The stock had multiplied by 11 between April 2020 ($8.36) and January 2021 ($96.50), but then collapsed and today, closing at $9.23, is down by 91% from that peak....
....MUCH MORE
Even with First Solar it is not easy:
...On October 30 we posted "First Solar Q3 2024 Earnings Call Transcript (FSLR)" with the intro line "It sounds like dead money for at least a quarter." Straight analysis in ten words informed by a lifetime at the market.
So far so good.
On November 2 the Des Moines Register published "Iowa Poll: Kamala Harris leapfrogs Donald Trump to take lead near Election Day. Here's how" about which the BBC gushed:
A new poll of voters in Iowa suggests that Kamala Harris is leading with 47% over Donald Trump's 44%.The survey was released by the highly regarded pollster Ann Selzer, who regularly carries out surveys for the Des Moines Register newspaper....MarketWatch did not refer to the "highly regarded pollster", instead going with "Trump election odds tumble on betting markets after Iowa poll shows Harris lead".The stock which had traded as low as $183.68 on October 30 (closing at $197.50), hit $221.20 on November 4.This morning's MarketWatch story is headlined "Renewable-energy stocks tank after Trump wins White House"The stock is trading at $183.20 down $32.69 (-15.14%).
....MUCH MORE
Here's six months of price action via TradingView:
That is indeed what the old-times used to call "dead money." Good fun though in early November. You can see when the political pollster Ann Selzer claimed Vice-President Harris was ahead by three percentage points.
Guided by the first inductee into the Climateer Hall of Fame we have attempted to avoid the traps and pitfalls the equity market is littered with:
Finally for investors in rent-seeking organizations there is the real risk that the politicians will change the rules. Heed the words of Sen. Simon Cameron (R&D!-Pa.):
Our Hero
That's an April 2009 iteration of the boilerplate in "RENEWED ENERGY: Solar Seeks Special Place in Climate Bill (Rentseeking to the Fifth)".
