Solar, it turns out it's going to be this massive money making market for the next decade or more, so what's the dealio?
I understand there were some concerns about Italy, forward looking over capacity, margins and for the lack of a better term, blah, blah, blah.
Great so earnings for this quarter and most likely the year will be lower then 2010, i'm also gonna go out on a limb and say MAY be lower. With all of the worlds largest countries rabblerousing in the beginning of 2011 about their desire to drive the solar industry into the stratosphere, it could have a substantial impact in the second half of this year.
I also understand the concept that when a stock is trending down, you sell short. The stock price drops sending investors running, turning away new money, driving the price down lower which brings more shorts to the game of the day, cool.
Maybe American investors really are just afraid of Chinese companies but what about the rest of the world?
Does anybody really doubt this stock can go to $2? Why not? SOL, LDK and JASO are all trading at a value reserved for bankrupt companies, so what does a price/valuation really mean? Their peers, many even Chinese trade at multiples double, triple or in FSLR's case 6x SOL's value.
I believe poly panels will eventually beat out thin film panels in cost. I believe Chinese labor will be cheaper then American labour for many years to come. I believe the Chinese will accept lower margins to force their competition out of business. Sum it up and I believe the Chinese will beat out most of their foreign competitors in the next 5 years.
Sure there are people and industry's who stand to lose at solars expense (natural gas and coal power generation) and there have always been influence from large industries to protect what they have. Do I believe any of these people are driving down the price? No. Most of these Chinese companies will still prosper at a share price of $1 so where's the point? They are not affecting their ability to operate.
Do I believe any of these companies to be fraudulent or have any financial difficulties, no. LDK is half owned by the CEO, if SOL gets down to a share price of $4.53, the stock would be worth $4.53 just in cash. You'd get a 57% return if the company went bankrupt.
Maybe I'm not the smartest guy in the room, but something just doesn't add up. I feel like I'm buying Microsoft (so to speak) in the 80's. Who would have sold their shares of SOL in a buyout for $10.50 two or three months ago, I doubt enough to count. Who would sell their shares today for $10.50?
Maybe I'm just trying to rationalize to myself how a good company in a high growth sector can trade below book value and be trending lower. I know I'd love to see a provision when I buy a stock that says, if I accept MY shares to be lent out to be short sold. Why would I ever allow someone to work against my position with my own shares? Maybe someone can help fill me in on what apparently everyone but me gets.
please keep writing. I like to know that members of human kind have logic as their guide and reason as their adviser. Unfortunately will live in days that free market has no "free" mechanism anymore. Chinese have controlling and autocratic approach to their political life. They call it law we called communism. In America what is called law is usually result of more money in a bank and greater ability to flex reality. We are not trading on the free stock exchange, I hope this is clear to all. When someone decides it is over it will be. One need to only guess when, and you will be able to get some crumbs from the table or slap across the face if you coming in a wrong time. Like old days you know.
Everything you said is absolutely true. Good homework. However, fundamentals and technicals are two completely different things and only because all the solar stocks have been getting hit in unison do I believe this selloff only to be some large managers just dumping the basket of them all together. In other words, it's not company specific - which is when you worry. If SOL was the only one getting crushed of the group, then we'd have a problem. That's not what's happening.
When you have a bunch of really low-float stocks that are getting sold off to probably just raise money or even something as simple as stops getting hit, then you get moves that are magnified than they otherwise would be.