can't believe it they do this again
just look at the volume - this will end at day lows and will likely go lower next week as institutional investors are heading for the exits - didn't you listen to the conference call ? Why are you staying with this company instead of switching into much better players like JKS or YGE for example ? Why didn't you take your huge profits when the stock was around $5 ?
clearly the stock is getting removed from the portfolios of alternative energy institutional investors currently as the company left analysts scratching their head during the conference call. Actually nobody did understand the company's motivation for the sudden change in the long standing business strategy and the corresponding termination of long term wafer supply contracts.
Given the painfully weak balance sheet (despite an equity offering during the quarter), the permament removal of polysilicon production capacity, poor margins and close to zero downstream exposure the stock should be avoided until the company finally proves they will be able to participate in the solar recovery.
Except for bankrupt players Suntech and LDK and much smaller peer CSUN I don't see a weaker company in the whole business segment currently. This one should continue to underperform its peers by a wide margin.
that was my first thought when I read the press release yesterday - but after listening to the conference call I changed my mind as this in fact was one of the worst calls I have ever listened to. There's a transcript on seekingalpha available so everyone can assess management's statements for himself.
But after learning that the company has no clue when the Chinese local governments might finally decide to pay out subsidies for projects already connected to the grid and a huge strategy change from a hybrid wafer / module model to an almost sole module producer I guess the stock is still overvalued here as the weak balance sheet and the risky business model change worsened by uncertainty about cash flows from the Chinese government and the failed polysilicon factory upgrade makes this one look like a big loser among Chinese solar peers (apart from STP und LDK of course).
perhaps you guys should note that the original stock trades on the Sao Paolo stock exchange in Brasil. Therefore the US ADR trading always adjusts to the share price in Brasil - once Brasil is closed the ADR usually moves up in the US as uneducated investors think this will pick up momentum.
so short the stock just before closing in the US and buy back in pre-market each day - this is so easy that I am almost ashamed of making so much money without even thinking.
one time impairment charge I wouldn''t care about at all - much more disappointing is the weak wafer shipment guidance going forward and management's comments about the Chinese government not paying promised subsidies
would cover here and wait for the Q4 earnings call - this is not the time to be short the stock - now that they have raised cash they will be able to predict a pick up in business for another six quarters or so until investors realize that the company is mostly hot air with the exception of the new low margin and ultra risky Apple business.
don't touch the shares here !!! wannbe smart guys have accumulated several 100,000s of shares in anticipation of the uplisting - it will take months for this overhang to be removed- watch this going back to $2
promising membrane technology but painfully weak management execution - will revisit the shares in the low $2s at the beginning of next year
I didn't get the reduced wafer guidance at first and additionally the conference call went pretty bad so my advice would be to stay on the sidelines.
ok - one can extrapolate the wafer guidance from the fully year wafer shipment outlook - so wafer shipments will be down a whopping 200 MW qoq which will of course impact revenues and profitability. So my calculation of a profitable Q4 looks pretty much wrong here - in fact revenues might come in below estimates.
conference call also going rather bad with analysts clearly puzzled about the impairment,reduced wafer shipment guidance and problems with getting paid solar subsidies from Chinese government entities.
in fact GTAT was forced to debook most of their wildly touted sapphire backlog - and given the fact that the company was as desperate to strike an ultra-low margin, high risk and EXCLUSIVE deal with Apple just to generate at least some revenues and cash flows in the short term I would wonder how many potential customers remain for GTAT now that they are entered active competition with them.
I have to correct myself - the company offers no wafer shipment guidance in its earnings release - in fact they obviously canceled some wafer contracts during the quarter to focus on their own module business.
so I would like to take a step back here from my advice - would stay on the sidelines here
as results and guidance actually are significantly better than expectations. Gross margins still lag behind peers though but with the closure of the old polysilicon plant is forecasted to increase up to the double digits starting this quarter. Would expect the company to earn a small profit in Q4 when translating margin and shipment guidance into revenues and eps.
while the huge impairment loss might #$%$ investors short term the closure of the outdated facility will actually improve earnings going forward as there will be no further depreciation expense on those assets and the company will be able to produce or buy polysilicon cheaper than before.
gross margins are projected (at the midpoint of guidance) to come in at 10% in Q4 which will be a 25% improvement qoq
the setback looks like a great chance for investors to get exposure to a leading Chinese solar play which will cross the break-even line next quarter. The impairment charge is one-time in nature and will in fact impact the company's future results quiet positively.
be careful though and play this using a scale in strategy starting below $3.70
GTAT made quite clear on the last call that THEIR solar business isn't rebounding at all. And the LED market is far from booming when looking at companies like CREE, VECO and AIXG. This is also evidenced in GTAT's net order intake which has been negative for some quarters now.
obviously the demand for the convertibles far outpaced the common share offering so the company decided to issue more debt than originally planned.
there's nothing wrong with strong demand for a debt offering and less immediate shareholder dilution than originally anticipated.
but actually I am wondering that even the heavily reduced share offering priced deeply in the hole - a whopping 13% below the price before the offering was announced - but given the share price development over the last few months I guess it is reasonable for investors to demand a high risk premium here
so with this additional cash infusion the company will be able to some more quarters of no-existent business going forward though debt is clearly mounting here
stop making others responsible for your personal mistakes - sure that jailbird Petersen cooked the books but even with manipulated figures the company never lived up to expectations - so a stop loss would have been a great idea I guess. Nobody forced you into this one and nobody told you to hold on to this or even average down after the mess became quite clear. So stop whining and move on.
sure you can and 95% of the people still long the stock will hold it until trading ceases finally at some point in the future.