First Solar, Inc. (NASDAQ: FSLR) must be in real trouble, even worse than what we have all been fearing. Rob Gillette is out as CEO. The circumstances behind the news were not telegraphed well at all. The unsaid message is a simple one: earnings are probably going to stink for some time, and the reaction is as if something far worse is brewing.
Mike Ahearn, founder and Chairman is stepping back in to serve as interim-CEO for First Solar. All that was noted about the Gillette departure is that it was “Effective immediately.” First Solar’s board of directors has also formed a search committee for a replacement and the company said that it is initiating a search for a permanent CEO.
How bad are things? Well, we are not accusing the company of this but the reaction in the stock is coming on as though there are some deeper issues other than just earnings, sales, and guidance. We do not want to contribute to the rumor mill so we are going to leave it there.
Keep in mind that Rob Gillette had a great record before coming to First Solar. He was not the founder, did not get First Solar off the ground, and can probably be replaced if First Solar’s prospects are not getting so bad that the company just cannot attract top talent.
Mr. Gillette came to First Solar from Honeywell International Inc. (NYSE: HON), where had spent four-and-a-half years as the CEO and president of Honeywell Aerospace and where he led some 40,000 associates at nearly 100 worldwide manufacturing and service sites. Prior to joining Honeywell in 1996, Gillette’s career included over 10 years at General Electric Co. (NYSE: GE) in numerous senior management positions. No offense, but it is not as though this guy was a Steve Jobs or Bill Gates.
The reaction: -18% at $47.16 and a 52-week low of $45.13 so far today. It is very rare for a company to announce news like this during the middle of the day and is even more rare to see a reaction of this magnitude for a replacement CEO.
JON C. OGG
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