Alternative Energy Investor Discussions

[DaveT]

wow, someone bought my remaining sol sep Calls for 0.25. theyre Worth 0 now

Arghh, I woke up 30 minutes after market was already open and my Sep13 calls were worth nothing already. Pain. Man, if I would have woken up earlier and read the press release, I definitely would have tried to exit my Sep and Oct calls at market open.

 

[sleepyhead]

Well I'm now into SOL. That capital raise looks good and should improve their position, unless I'm missing something?

It is not the worst idea to buy at these prices because the market cap of the company after dilution is still about the same (or slightly lower) than it was yesterday. But now you are getting a better capitalized company. A good deal for those who buy today.

CSIQ did an offering last month and the stock tanked from $14-$16 down to $10.66, before recovering back to the $14 level. It will take SOL a little longer to recover though.

Let's hope these companies don't need another offering in the near future.

Next in line to do an offering are YGE and TSL.

 

[DaveT]

SOL trading was halted apparently? can someone explain in easy term why the price would drop so bad with an offering ?

The SOL offering sucks (IMO).

Their stock was worth $5.50 but they rose $70 million at a share price of $4.67. This shows desperation. Why couldn't they raise money at a higher price? Also, instead of raising a secondary which will dilute the shares, especially so because SOL's market cap is low... why not find a loan? SOL doing a secondary suggests that they couldn't find anywhere they could take out a loan. Does this mean that loans for Chinese solars are no longer available or are going to be extremely difficult to get? Is the only way to survive and get cash to raise a secondary and dilute shares like crazy? Anyway, it sends a bad message... not only for SOL but potentially for other Chinese solars in need of cash.

And in addition they sell warrants with a strike price of $6.04 with an expiry date in 2017. This is another move of desperation, so it seems. SOL basically sells a 2017 option call with a $6 strike price. This is to raise more capital. But this just dilutes the common share pool more, eventually. And $6 strike price is very low, and the expiry is 4 years out.

Overall, it seems like SOL is doing a desperation secondary at low prices that is going to dilute their share pool more than necessary. Why not just wait a couple months when your stock price is at $7-8? Why did they need to raise so much at such low prices? Why couldn't they find a short-term loan to meet their cash needs?

Also, even if they needed/wanted to raise money now, why couldn't they just price their offering at $5.50/share and raise maybe $30-40 million? Forget the warrants. Raising at $5.50 wouldn't have damaged the stock that much. But raising at $4.67 and a large amount (their total market cap is under $400m, so $70m raise is a large % of their market cap), and then selling a bunch of low strike 2017 warrants... that's why SOL tanked this morning.

As you can tell I'm not happy about this secondary offering by SOL.

 

[sleepyhead]

Interesting article on solar energy and battery storage:

http://www.forbes.com/sites/peterde...merging-threat-to-utilities/?partner=yahootix

 

[DaveT]

It is not the worst idea to buy at these prices because the market cap of the company after dilution is still about the same (or slightly lower) than it was yesterday. But now you are getting a better capitalized company. A good deal for those who buy today.

CSIQ did an offering last month and the stock tanked from $14-$16 down to $10.66, before recovering back to the $14 level. It will take SOL a little longer to recover though.

Let's hope these companies don't need another offering in the near future.

Next in line to do an offering are YGE and TSL.

I hope SOL recovers, but I agree it might take some time.

CSIQ's offering was noticeably stronger (Canadian Solar | Investor Relations | News Release). They did at-the-market pricing for $50m to be purchased from "time to time." The stock didn't dip that much when it was announced (CSIQ Historical Prices | Canadian Solar Inc. Stock - Yahoo! Finance). It went from $12 the day before (8/14) to $10.64 on 8/15 and then to $11.47 the next day (8/16).

 

[sleepyhead]

I hope SOL recovers, but I agree it might take some time.

CSIQ's offering was noticeably stronger (Canadian Solar | Investor Relations | News Release). They did at-the-market pricing for $50m to be purchased from "time to time." The stock didn't dip that much when it was announced (CSIQ Historical Prices | Canadian Solar Inc. Stock - Yahoo! Finance). It went from $12 the day before (8/14) to $10.64 on 8/15 and then to $11.47 the next day (8/16).

What you are missing in your analysis is that Canadian Solar first announced that it filed the paperwork to the SEC for a "mixed shelf offering" up to $200m, which includes sale of common stock, bonds, etc. For some reason, I can't find the press release (didn't look too hard either).

The stock first went down after that announcement (can't remember how much, but about 10% I think). Then a few weeks later they announced the common stock sale and it dipped again.

What worries me is that these companies have $500m of cash on their balance sheets and they are significantly diluting shareholders in order to raise $50m - $70m. I think that a lot of the cash is restricted and their real operating cash reserves are a lot smaller.

When you are on the brink of bankrupcy you have to raise cash whenever feasible. These companies probably don't need the cash, but in case of a downturn in the economy it will come in very handy and could be save these companies from going under.

 

[Norse]

Btw really strong comeback on scty today!!

 

[electrictorque]

Oh Man Oh man... I was catching SCTY knifes but it payed off faster than what I expected. I hope other utility companies follow suite with Centrica Plc’s Direct Energy unit. it is a good sign.

 

[Royal TS(LA)]

@Shortslaver:
Good thing I got in at $29 then, hehe .

 

[electrictorque]

@Shortslaver:
Good thing I got in at $29 then, hehe .

that is exactly when I doubled my position.

 

[ggies07]

Interesting article on solar energy and battery storage:

http://www.forbes.com/sites/peterde...merging-threat-to-utilities/?partner=yahootix

Thanks for the article. Interesting indeed.

 

[Robert.Boston]

[moderator's note: some posts about installing solar on one's house were moved to Solar energy questions and answers ]

 

[sleepyhead]

The only thing that really bothers me about the SOL capital raise is that some (a lot of?) people already knew about this yesterday and that is why SOL was down 5% yesterday on heavy volume when all of the other solar stocks were going up.

A lot of trading going on with insider information. Those people should be investigated by the SEC and thrown in to jail.

 

[DaveT]

The only thing that really bothers me about the SOL capital raise is that some (a lot of?) people already knew about this yesterday and that is why SOL was down 5% yesterday on heavy volume when all of the other solar stocks were going up.

A lot of trading going on with insider information. Those people should be investigated by the SEC and thrown in to jail.

Yeah, I noticed that yesterday as well. It seemed odd at the time.

 

[Jonathan Hewitt]

SOL got hit hard today all thing considered...looks like it really tried to break $6 and when it didn't it sold off the rest of the day?

Yeah, I wrote this yesterday ^^. I guess I was wrong on why there was some sell off, haha...

 

[Norse]

Anyone know why trade stopped between 9.31 and 9.40 on SOL?

 

[mershaw2001]

Trading halt following a 10% or 15% decrease. Lets the market sort things out. There's also a clause that short selling can't happen the day after a circuit breaker trip, but I haven't seen that one hold true.
http://www.sec.gov/rules/final/2010/34-61595.pdf

Specifically, the Rule requires that a trading center establish, maintain, and enforce written policies and procedures reasonably designed to prevent the execution or display of a short sale order of a covered security at a price that is less than or equal to the current national best bid if the price of that covered security decreases by 10% or more from the covered security’s closing price as determined by the listing market for the covered security as of the end of regular trading hours on the prior day.

 

[fjm9898]

looks like the SOL secondary offer has shot the horse in the face. I am still holding my Jan options until Q3 earnings.

 

[sleepyhead]

looks like the SOL secondary offer has shot the horse in the face. I am still holding my Jan options until Q3 earnings.

And this is exactly what would happen to TSLA if they did another secondary stock offering in a matter of months; like some people suggest.

 

[fjm9898]

i dont see it being this bad. this thread has pointed out why SOLs offering wasent the best of ideas.
Just wish i would of taken profits, now i am back to square one. Yay for the stock market roller coaster. I just never get the timing right