Cash depletion in the quarter was $374 millions in the quarter. Pledged bank deposits was increased $90 millions during the quarter due to increased L/C for raw materails (Suppliers tightened up credit term? - sales didn't increase that much during the Q). Inventory increased near $100 millions. Work-in-process $220 millions adds up finished goods $353 millions, total $573 millions is way far exceeding Q4 revenue $410 millions (The company guided higher, but I don't see how they get to $440-520 millions given shipment info). The company burnt roughly $310 millions in the quarter, excluding $152 millions. They burnt about $158 millions during the quarter. With inventory way exceeding Q4 revenue, the best choice is really to conserve capital by liquidating inventory. At this speed, if they pretend that they are still a normally operated company. Cash on hand will be completely burned out within two quarters - Two quarters are on the assumption of burning speed roughly the same in Q1/Q4 as Q3 but excesssive inventory implied high-cost inventory largely intact; with ASP in fast down trend, hard to imagine Q4/Q1 cash flow not worsen.
The only savor is that bank extending credit. Would they? would they extend Chinese credit to benefit American shareholders?
This post is purely for academic discussion. Don't short it. Except Peng's 50% share, short is already near 50% of floating. If you add the open interest at put options, there is probably total 60% short interest on the float. Short squeeze will be maintained all the way till time bomb finally explodes not to mention those die-hard idiots like Hobo still out there.
LMAO down over 40% since earnings now are we?
LDK is up 43.82% in last 9 days! Poor shorties, and FTD brokers with no end in site!
9) 4.07 8.82%
8) 3.74 3.31%
7) 3.62 1.97%
6) 3.55 3.80%
5) 3.39 held gains
4) 3.42 8.23%
3) 3.12 held gains
2) 3.16 5.33%
1) 3.00 6%
LDK stock was up On Friday(12/02/2012).
LDK is kind of risky as this article argue that
LDK is mathematically bankrupt without a guarantee from China. From Q3/2011 CC, LDK really improves a lot on it's non-silicon processing cost(a little bit below 70c/watt), and it's poly may be a little bit above $30/kg.
After the ITC ruling, CDB should be worried to give big loans to Chinese Solar Company. If CDB grant unreasonable loans, it may open the door for Europe to file illegal subsidy also. Then the consequence will be even much worse.
For Chinese government to save it's solar industry should be promoting it's own domestic need and let fair competition goes on.
I can see a path to low end guidance if they are using midrange shipments with $0.45/$0.95. I believe the Poly sold will be sold at a loss. This requires a sale of 20-30MW of projects at $3/watt