Granted that First Solar (FSLR) is the big momentum momma of the solar sector, but still…
The stock, already up $22 a share in a week as investors bid shares higher in anticipation of the company’s July 30 earnings report, closed the day up $5.56 a share.
And then the fun started. The company blew away consensus projections, reporting 49 cents a share in earnings and about $70 million in revenue more than analysts had expected.
That sent shares soaring in the after-hours session that begins after the regular trading day is done. First Solar tacked on anothr $10 above its closing price. And then, in reaction to conference call comments about a lack of “robust” financing” for solar projects outside of Germany and the company’s willingness to cut prices if that kept orders coming the stock fell. Like a rock. Shares finished the after-hours session down $6.30. That was a swing of better than $20 a share from the high in after-hours trading.
You’ll notice that the news that “caused” the after-hours plunge is hardly earth shaking. Germany has long had one of the world’s strongest financing for solar installatons so it shouldn’t be a surprise to anyone who owns First Solar that financing elsewhere isn’t as robust. And a company saying that it’s willing to cut prices to keep business sure isn’t the same as a company saying it had slashed prices in an effort to survive.
I think the drop in First Solar share price had everything to do with the general nervousness in this market as stocks get increasinly over-extended–and very little to do with the news from First Solar alone.
Although the major indexes went up on July 30, they’re all aching for a correction and every technician on Wall Street has been telling this to everyone he or she meets for days now. This week the charts have gone from over-extended to more over-extended.
With stocks still going up, no one is quite willing to head for the door yet, but everyone is poised to move in that direction. I think that’s exactly what happend with First Solar: with the stock up $30 in a week early in today’s after-hours session, why hang around?
It’s just another sign of the short-term, big-time volatility that investors can expect from this market in the coming days.
Hi Jim,
What is your opinion on YGE and TSL? Chinese government subsidies are impressive and should provide competitive advantage to Chinese solar companies.
Jim, I like FSLR. Unlike other solar companies, it has its unique product, which has a competitive price edge. I recall you saying that you like it when the price was around $200. So, I was wondering, what is your “trigger point” on this stock? and waht is the target price?
Let’s say the S&P manages 1000. A typical retrace after a sharp rally like that would be back to 895. A sharper correction, but still typical, would be back to 803 or so.
I donot think we will go any where near march lows but S&P 800 is possible by middle oct or so
They way markets are behaving looks like 2-3 months downtrend going to start soon
Yes, thats a good question. What do you think Jimmy Boy??
Hi Jim, when this correction does come, do you think we be testing March lows?