Shares of First Solar Inc. (NASDAQ: FSLR) are up about 12% in the past five days, including jump of more than 6% yesterday and a similar-sized rise this morning. The company opened an operating subsidiary in Thailand last week to help the company “expand the market for utility-scale solar photovoltaic power plants in the local market.”
It’s hardly news that First Solar wants to boost its utility-scale business. Unlike its other major US competitor, SunPower Corp. (NASDAQ: SPWR), First Solar continues to chase big projects while SunPower chases the rooftop systems for both residential and commercial projects. That the two companies are treading different paths isn’t news either.
First Solar topped its consensus target price of $23.26 yesterday and trades above $24 today. For a stock that traded above $300 in mid-2008 that hardly seems like a victory until you recall that the shares fell to less than $12 earlier this year. Why the sudden enthusiasm?
It appears that options traders are responsible for the recent price moves. The action is pretty heavy for September options. On the CBOE, puts at $22 have the highest put open interest and calls at $25 call the highest call open interest.
No one expects the price to rise above $25, and when the price falls to $22 or lower, all those puts will already have left the building. And those $25 calls? Vanished. This option buying has got to be what’s stoking the share price.
Shares of First Solar are up about 9% just before noon today at $24.50 in a 52-week range of $11.43-$103.60.
Paul Ausick
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