First Solar Flirts With All-Time Lows… A Busted IPO Case (FSLR)

First Solar, Inc. (NASDAQ: FSLR) hit yet a new 52-week low today, but the psychological damage is just about to get a whole lot worse if this stock’s price trajectory remains on its current course.  First Solar hit a low of $20.05 this Monday morning.  What investors need to consider is that First Solar came public in late-2006 in an initial public offering of 20 million shares at $20.00 per share.  Technically we have been under the post-IPO price for some time as the stock went above $24.00 on the debut and then rode higher and higher with the rise of oil and alternative energy shares from 2006 into 2008.

When First Solar came public, it was on the heels of the IPO from SunPower Corporation (NASDAQ: SPWR) coming public a year or so earlier and after it has risen 50% before First Solar came public.

Now there is a management gap at First Solar, government spending cuts are biting it you know where, margins are cratering in the solar sector, China is dumping panels often under the real cost of production, and now natural gas for plants is so cheap that they are almost giving it away.

The problem with First Solar now is that its shares fall on a day when the markets are up or down.  The stock also has fallen whether oil is rising or falling.  And the chart is about as attractive as a hat full of chopped up fingers.

With shares down 2.4% at $20.45 the market capitalization rate is a mere $1.77 billion according to Yahoo! Finance.  In the past it was always a situation where “OK, maybe this is finally the end.”  Now it is just, “Wow, again?” each day by investors.  Shares have been public for far too long to consider this situation a broken IPO.  Still, if this is not sad what is?

JON C. OGG