Every solar stock I follow, about 15 are off lows, GTAT
is the only one that isn't. Is this company going to suffer the same fate as Energy Conversion Devices, the old ENER-ENERQ? Will GTAT go bankrupt? The stock price sucks.
Do not bash me, I am long GTAT as of yesterday. So, if you can explain why GTAT is not off it's lows, and STP, CSIQ, TSL, FSLR, SPWR, HSOL, SOL, JASO, YGE, JKS, LDK, AMAT, SI, all are off their lows basically, I would appreciate your thoughts?
Most manufacturers across the entire supply chain and across the globe are sitting on not only large inventories, but also idle manufacturing capacity, prices are below production costs. Situation has slightly improved recently wrt spot price of polysilicon for instance, and China's govt. increasing domestic demand by policy.
Most of those companies you listed were seen as doomed with negative earnings and no way out of their huge debts, margins and/or books are so bad that every time the market situation improves even by a little, these stocks go up like 100%.
But GTAT can't hope to sell much of anything to them, as long as there's so much capacity -already paid for- that's sitting idle out there.
The manufacturers have to compare the cost of turning a switch on their already paid for equipment vs upgrading (let's say with GTAT's new HiCz process). GTAT will have to sell their brand new technology cheaply enough that those money starved manufacturers can finance those upgrades.
look at it another way, the revenue available to GTAT from HiCz will come out of the theoretical cost savings of $6/kg on the world's polysilicon yearly output. According to PVInvestor that's about 300k ton/yr in 2013, so that's $1.8B/yr. But consider:
1. so much of it is offline, and will stay so no matter the cost savings - it's limited by demand for end products. This should improve by 2015.
2. the producers will want to see some (most?) of these cost savings help their own dreadful bottom lines.
3. not all of the world's capacity will be upgraded, at least not right away. China's policy is propping up zombie producers like LDK with awful cost structures, maybe they're interested in saving jobs, but banks won't help LDK finance a retooling of their poly plants.
So how much of the $1.8B/yr is left? it's hard to say, probably still a very nice amount, but it seems like that won't be enough to send GTAT to the moon all by itself. And they still have to deliver on their promises. and management has to not award themselves half the company when they finally get HiCz out the door.
huge consolidation coming in module manufacturers. gtat sells to manufacturers. i think its normal that they're lagging their customers' recovery especially because it's a cyclical recovery based on potential more than actual results for many of gtat's clients. there is a lot of uncertainty in guessing who gtats clients will be even a year out.