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

Previously:

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

In Case You Missed EUR/USD Yesterday

EUR/USD is currently at 1.4045 up 99 ⁴⁴/₁₀₀%.*
Here's a bit of a pukefest, from Slope of Hope:



*"99 ⁴⁴/₁₀₀% Pure" was one of  Procter & Gamble's advertising slogans for Ivory Soap.
Here's one of their Ivory products. The young lady holding the baby is Marilyn Chambers.
She went on to do big-time porn.
She wasn't depraved enough to become a fund manager.

Greenland: Cradle of Life on Earth

There was a question mark in the headline but I dropped it.
From BigThink:


What's the Latest Development?

For the first time, scientists have identified the necessary requirements for life in a specific earthly environment. The mud volcanoes at Isua, in south-west Greenland, may have been where life first began on Earth some 3.8 billion years ago, say an international team of geologists. According to the scientists, the mineral serpentinite, which is often found in the walls of hydrothermal sources like ocen ridges and is plentiful in the area of Greenland they examined "could play a major role in the appearance of the first biomolecules." ...MORE

First Solar Analyst Roundup (FSLR)

With five minutes to the close FSLR is up 6.61% at $46.13.
Mark Gongloff at MarketBeat does the heavy lifting:

First Solar Also Rises, But Analysts Waiting For Strategy Details

Never let it be said that First Solar doesn’t move quickly.

The company drop-kicked its CEO unceremoniously yesterday, causing a bit of a panic in the market.
Seeing the reaction, the company raced ahead to deliver third-quarter earnings this morning.
The results weren’t great — earnings came in below expectations, and the company trimmed its revenue guidance for the year. The earnings call is still not until next week, and First Solar remains tight-lipped about why it axed Rob Gillette.

But the move seemed to mollify investors a bit, and First Solar shares are up nearly 9% today, making some of the ground lost in yesterday’s 25% bloodbath.
Analysts are a little less excited.

Needham kept its “hold” rating on the company, citing pricing pressure in the solar industry:

The company again lowered full year guidance and given the magnitude of the cut, we suspect pricing pressures from c-Si competitors have started to pressure FSLR’s module prices. Given the weaker prices and the slowdown of cost reductions, we see little room for earnings upside. We see uncertainty given the current turmoil and maintain our Hold rating.

CLSA, which has an “underperform” on the stock, cut its price target to $54 (which makes you wonder why they have a “sell” rating) and echoed the warning that the business environment for First Solar is stormy...MORE

One of the Models Has Hurricane Rina Headed Straight for New York City

Granted, this is long range stuff.
And Rina will have to recover from the drop in intensity from Cat 2 to tropical storm.
And, following the hard right turn, it will have to hang a louie, cross Florida, rejuvenate yet again, cross part of North Carolina, make it past Chris Christie and head for #OccupyWallStreet.
Or not.
However it works out this is as bizarre a track as I've seen.
From Wunderground:

"60 Elvis Impersonators Flee Fire Alarm"

Enough First Solar, we now return to our regularly scheduled programming.

Some years ago I was trying to track down something or other relating to Ted Binion's silver hoard and found myself standing on Fremont Street quoting Hunter S Thompson:

 "Still humping the American Dream, that vision of the Big Winner somehow emerging from the last minute pre—dawn chaos of a stale Vegas casino. Big strike in Silver City. Beat the dealer and go home rich. Why not? I stopped at the Money Wheel and dropped a dollar on Thomas Jefferson—a $2 bill, the straight Freak ticket, thinking as always that some idle instinct bet might carry the whole thing off. But no. Just another two bucks down the tube. You bastards! No. Calm down. Learn to enjoy losing....

when the longest limousine in a city of long limos pulls up and all these Elvis impersonators start piling out.

It was hilarious and I lost it and couldn't stop laughing at the sight of maybe two dozen Elvi, young Elvis, older Elvis, fat Elvis, leather pants Elvis etc.
About half of them went with the Jumpsuit Elvis look. Sooo... when I saw this story:

From the Telegraph:

A group of 60 Elvis impersonators had to flee a charity fundraiser after a faulty smoke machine set off the fire alarm, it has been reported.

The lookalikes were attending a charity function in Rochester, Kent, when the fire alarm sounded late on Saturday night.

It is believed that it was set off by a faulty smoke machine that formed part of the Elvis act at the fundraiser.

Guests leaving the hotel were stunned to see a group of around 60 impersonators, dressed in wigs and full rhinestone costume, gathered in the car park.

"I was in a bit of a state getting out of my room," one guest told the Daily Mirror. "But I was more confused when I got outside to see all these people dressed as Elvis.

"There were people in full Elvis jumpsuits and wigs standing by a roundabout, looking a bit worse for the wear."...MORE

From last year's "When Too Much is Not Enough":

First impressions matter.










How many Elvis impersonators could you fit in this ride?

from Web Urbanist:
You Name It: The Biggest [Blanks] in the World!

First Solar Cuts Profit Forecast, Spending Plans; Possible Reason for CEO's Departure (FSLR)

The stock is up 12.90% at $48.85. A little mystery/history in reverse..
First up, Reuters:

* Sees lower full-year sales, profits
* To slow spending amid weak pricing in market
* Analysts see likely layoffs
* Shares rise as much as 21 pct after Tuesday selloff
First Solar Inc slashed its profit forecast on Wednesday and said it would slow spending as the industry struggles to adjust to the steep decline in the price of solar panels.

Shares of the company, however, rose as much as 21 percent, in a rebound from Tuesday's selloff when the company lost about a quarter of its value after it ousted Chief Executive Rob Gillette.

Even with the rebound, those shares have dropped more than 60 percent so far this year.

Solar makers are suffering amid a 40 percent drop in the prices of the panels which has squeezed profit margins across the industry and driven some companies, including U.S.-based Solyndra, into bankruptcy.
First Solar, which also reported third-quarter profits that appeared to lag Wall Street forecasts, is not expected to suffer that fate, according to analysts.

"Am I afraid of First Solar going out of business? No, I'm not," said Avian Securities analyst Mark Bachman....MORE

And from Benzinga:
Jefferies on First Solar: Weak 4Q Guidance Likely Reason for CEO Dismissal

Jefferies & Company has published a research note on First Solar (NASDAQ: FSLR) after the company reported 3Q earnings.

In the report, Jefferies writes, "FSLR put its 3Q on the tape, and lowered its FY guide. The magnitude of the weak 4Q guide – almost half its prior guidance – is likely the reason for the CEO dismissal, which is a positive versus worst fears of an accounting restatement, DOE loan scandal, or fraud. It was smart for the board to release the results, but no comments were about the four large projects."

Jefferies maintains its Hold rating and $47 price target on First Solar, which is currently trading up $5.21 from yesterday's $43.27 closing price.

Climateer Headline of the Day: Department of 'duh' Edition (FSLR)

From Tickr Watch:

Notable Price Movement Detected In Shares Of (NASDAQ: FSLR)

The stock closed down 25.33% at $43.27.

Earlier:

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

Who Got Stuck Holding First Solar? (FSLR)

Via ZeroHedge:

...And the one person we wouldn't want to be today is the Maverick analyst who decided to go from 0 to 2.5 million shares in the name in Q2.

(click to enlarge)

"First Solar: It’s the Mystery That Makes It Taste So Bad" (FSLR)

MarketBeat's Mark Gongloff nails it:

CEOs come and go all the time in this crazy world without causing big trouble for their company’s stock price, but the departure of First Solar’s CEO today is crushing the stock.

First Solar is down 25% at last check, on the news that Rob Gillette is leaving the company immediately, with nothing much in the way of explanation.

Early analyst reaction to the news suggests the stock could be selling off mainly due to the company’s staying tight-lipped about exactly why this is happening.

Credit Suisse analysts, who are “neutral” on the stock, write:

The news is clearly negative – the company has not yet announced any conference call to go over the news (we would highly encourage the company to host one as soon as possible), the abruptness of the announcement and terse wording of the release, the fact that earnings will likely be next week and the CEO is stepping down just a week in advance, and the fact that FSLR had planned to host a reception with the CEO on Nov 15 all sound unfortunately quite concerning. Barring a surprise announcement of a new CEO (perhaps company brings back some of the recent management that have left), the news is clearly negative for the stock....MUCH MORE

Earlier:
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)

Al Gore, No Score!: GIM Stuck with 959,075 First Solar Shares (FSLR)

Long time readers know that we've had less and less to say about the solar space as the zeitgeist changed and the fundamentals asserted themselves.
As part of our change in focus we've stopped reporting on Mr. Gore's Generation Investment Management.
Until today.
Last year we posted "Al Gore's Generation Investment Management's Portfolio Ain't So Green: It's Deliberate":

Every time GIM files their 13F quarterly report with the SEC I trot out some boilerplate:

Two comments I've made in the past but have to repeat:
1) These are only the publicly traded U.S. stocks in their portfolio. Private deals, foreign stocks, cash etc. don't show up.
GIM is reputed to be running $5 Billion, these securities only total $2.36 Bil.
2) This is not a very "green" portfolio.

The intro to the Nov. 2009 filing was a bit more flippant:

Al's got wood!
And implements!
As we've commented before this is not a particularly green portfolio.
These are only the publicly traded U.S. names. Other investments (GIM is a large holder of carbon trader Camco, CAO.L, for instance) they aren't required to report, so they don't.

Here's the inside scoop, from NewNet:

NewNet Investor Profile: Colin le Duc, Generation Investment Management...

As of GIM's last SEC filing, August 8, 2011 for the quarter ended June 30, GIM held 959,075 First Solar shares.
The stock closed at $99.88 that day.
The prior 13F, filed May 18 when the stock closed at $129.24 showed 632,674 shares in the portfolio.

Generation Investment Management was making the rookie mistake of averaging down on a busted high flyer.

UPDATED: A Huge Score For Jim Chanos and the First Solar Shorts (FSLR)

Updates below
Original post:
The stock is now down 25.06% at $43.43 on 5 1/2 times average daily volume.
FSLR is consistently among the top five most shorted components of the S&P500 with 20,335,825 of the 86mil outstanding short in the last Nasdaq report.

From the WSJ's Deal Journal:
First Solar: Was Jim Chanos Right?

Investor/cranky guy Jim Chanos trashed solar energy in a public investor presentation this spring. His prediction may be playing out today.

The investor enthusiasm for green energy companies was a bubble, Chanos argued at the Ira Sohn investor conference. His presentation was called “Alternative Energy: Does Solar + Wind = Hot Air?”
Chanos’s presentation was before the very public and controversial collapse of solar-panel maker Solyndra. And today, First Solar has spooked investors with the unexpected departure of CEO Rob Gillette.  First Solar shares are sinking about 20% in recent trading.

Chanos singled out the possibility of management defection at First Solar, a call that looks pretty prescient right now. Here’s what Chanos said...MORE

I wrote the following post in April 2011while the Chinese markets were still holding up. Now they've collapsed too.
Jim Chanos (!) Spanks First Solar (!) FSLR)

Maybe Jim is just crabby about his China short.
Regardless, he is not someone you want trashing your stock. FSLR is trading down $3.23 at $141.50 after trading as low as $137.18.
From Tech Trader Daily:
FSLR Down On Chanos Comments, Exec Resignation

Shares of First Solar (FSLR) are down 4% at $139.15 after short-seller Jim Chanos made negative comments about the company during an interview on CNBC this morning.

Chanos, president of hedge fund Kynikos Associates, called the company “problematic” and noted high levels of insider selling.

Also today, First Solar’s president of operations Bruce Sohn resigned.
Sohn, who oversaw manufacturing, procurement, engineering and construction operations, joined the company in 2007 shortly after its IPO....MORE

Regarding the insider selling, we've chronicled billions of dollars worth highlighting the bails by Chairmen Ahern, former BFF Goldman Sachs and the Wal*ton interests....

Ditto for this May 25 post:
"Jim Chanos Trashes Solar Energy as ‘Hot Air’" (FSLR)

Updates:
"First Solar: It’s the Mystery That Makes It Taste So Bad" (FSLR)
Al Gore, No Score!: GIM Stuck with 959,075 First Solar Shares (FSLR)
What the?...First Solar CEO Out; Replaced by Chair Ahern (FSLR) 

What the?...First Solar CEO Out; Replaced by Chair Ahern (FSLR)

Holy crap!
The only thing worse than an unexpected CEO adios is if the CFO leaves.
Oh wait...
There might be a story here.

From Barron's Tech Trader Daily:

Effectively immediately, Rob Gillette is no longer chief executive officer at First Solar, which just sent out a terse press release stating chairman and company founder Mike Ahearn will serve as interim CEO.
No further explanation was offered....MORE

The stock is down 18.20% at $47.20
And Ahern is almost out of exercisable options!
Here's the press release. The company thanks Mr. Gillette for his service.
First Solar Announces Chairman Michael Ahearn to Serve as Interim CEO

Recently:
First Solar Closes at Lowest Level in Four Years, Former Chairman Parties (FSLR)

Chartology: Light crude oil bullish break out

Paging Paul Krugman...
WTI is currently up 2.56% at $93.61.
From Alpha Global Investors (click to enlarge):

Light crude oil chart update ;

Current pattern confirms bullish break out

PS : Just one more fact to confirm that the bull market is back !

Also at Alpha Global:
Live cattle huge move
Euro Dollar update

See also Bloomberg:
Oil Rises to 12-Week High as Declining Supplies Spur Bull Market

Solar and the 99%

How can it be right that one object, the Sun, contains 99% of the mass in our Solar System while everything else has to make do with less than 1%?

In fact, the Sun contains 99.86% of the mass in the Solar System. And the Sun is 73% hydrogen, so most of the matter in the Solar System is hydrogen, with the remaining amount being mostly helium, oxygen and carbon. Everything else, like the metals and rocks is just a tiny fraction of a fraction of the mass in the Solar System. -factsofworld

I'm just askin'.

Catagory 2 Hurricane Rina to Brush Yucatan, Hang a Ralph

This could get interesting.
More this afternoon. For now here's the five-day track forecast from Wunderground:

Colbert: It’s ‘a crucial time in the fight for corporate civil rights’

He's closer to the zeitgeist than most.
Regarding 'Corporate Personhood' I'll predict the Supreme Court revisits .Santa Clara County v. Southern Pacific Railroad within two years.
Keep an eye on Justice Sotomayor. During her first appearance with the Supremes she said:

Judges "created corporations as persons, gave birth to corporations as persons," she said. "There could be an argument made that that was the court's error to start with...[imbuing] a creature of state law with human characteristics." 

From The Raw Story:

Stephen Colbert decided Monday evening that it was finally time to reveal what his Super PAC stood for.
On the latest episode of The Colbert Report, the Comedy Central host made his important announcement after a few months of analyzing fans’ feedback. Colbert was spurred on by a letter from two kids named Charlie and Grace, who planned on starting a lemonade stand for the PAC if only they knew what it stood for.

With the words “people” and “corporations” being used the most in his viewers’ world cloud, Colbert felt the fans wanted his PAC  ”to stand for the self-evident truth that ‘Corporations are people.”...MORE, including video.

#OccupyWallStreet to March in Solidarity With the NWO For A Financial Transaction Tax

Well now, this is a bit more concrete than some of the demands.

I don't actually know if the New World Order folks are going to lace up their Manolo Blahniks for the march.
I would like to see the two Georges (Bush, Soros) arm-in-arm at the head of the parade.
From Adbusters (the folks who organized the first protest):

Oct. 29 #RobinHood Global March
We take from the rich and give to the poor. 

ADBUSTERS TACTICAL BRIEFING #15

Alright you redeemers, rebels and radicals out there,

We're living through a magical moment … #OCCUPYWALLSTREET has catalyzed into an international insurgency for democracy … the mood at our assemblies is electric … people who go there are drawn into a Gandhian spirit of camaraderie and hope for a new kind of future. Across the globe the 99% are marching! You have inspired more than you know. People are digging into Act One of the long Spring.

Its now time to amp up the edgy theatrics … deviant pranks, subversive performances and playful détournements of all kinds. Open your insurrectionary imagination. Anything, from a bottom-up transformation of the global economy to changing the way we eat, the way we get around, the way we live, love and communicate … be the spark that sustains a global revolution of everyday life!

As the movement matures, lets consider a response to our critics. Lets occupy the core of our global system. Lets dethrone the greed that defines this new century. Lets work to define our first great demand.

OCTOBER 29 – #ROBINHOOD GLOBAL MARCH
This is a proposal for the general assemblies of the Occupy movement.
Eight years ago, on February 15, 2003, upwards of 15 million people in sixty countries marched together to stop President Bush from invading Iraq … a huge chunk of humanity lived for one day without dead time and glimpsed the power of a united people's movement. Now we have an opportunity to repeat that performance on an even larger scale.

On October 29, on the eve of the G20 Leaders Summit in France, let's the people of the world rise up and demand that our G20 leaders immediately impose a 1% #ROBINHOOD tax on all financial transactions and currency trades. Let's send them a clear message: We want you to slow down some of that $1.3-trillion easy money that's sloshing around the global casino each day – enough cash to fund every social program and environmental initiative in the world.
Take this idea to your local general assembly and join your comrades in the streets on October 29.
for the wild,
Culture Jammers HQ

More to come. 

Bloodsuckers: Vampires vs. The 1%

I Love Charts has been on a bit of an #OccupyWallStreet link-roll.
Here's the latest, this time from Pleated Jeans:

Joe Biden Was Right: #OccupyWallStreet Leads to More NYC Shootings

I must admit I was dubious when the Vice President said:

“Well, obviously, we have a rapist in Lincoln Park. He’s climbing in your windows, he’s snatching your people up, trying to rape them, so you need to hide your kids, hide your wife and hide your husband, because they’re raping everybody out here.” 

But now, the New York Post is reporting:

Bullets are flying over Broadway -- and everywhere else in the city.

The number of people shot surged 154 percent two weeks ago -- to 56 from 22 over the same week last year -- and spiked 28 percent in the last month.

Last week tallied another increase in victims -- 22 people had been hit through Friday, including the three victims gunned down outside a Brooklyn school Friday.
Last year, only 17 shooting victims were logged for the entire week.

The recent gunplay has now pushed the number of shooting victims this year slightly above last year’s tragic tally -- to 1,484 from 1,451 -- through Oct. 16.

Four high-ranking cops point the finger at Occupy Wall Street protesters, saying their rallies pull special crime-fighting units away from the hot zones where they’re needed.

Since Occupy Wall Street took over Zuccotti Park on Sept. 17, the NYPD has relied heavily on its borough task forces, the department’s go-to teams for rowdy crowds....MORE

On the other hand I may be confusing the Veep with someone else.