The first rate pain continues with First Solar (FSLR). At the time of posting, First Solar has dropped over 4% (to $108) in after hours trading upon the release of its 2009 annual report. No doubt the seventeen pages describing risk factors contributed to the latest reason to sell First Solar shares. These morbid details are a flash reminder of the numerous risks facing First Solar and most other solar companies. This after-hours loss wipes out the broad intra-day gains in solar stocks on news that Germany may only cut subsidies by 15% instead of 25%.
This reaction is little different than the reaction to last year’s release of the 2008 annual report (February 25, 2009). At that time, First Solar had just released a horrific earnings report that sent the stock down 21.8%. FSLR closed down another 2.5% after the market had absorbed the news from the annual report. The good news is that after another day of selling, FSLR finally bottomed for the year (intra-day low of $101.53 and closing low of $105).
It is too early to guess whether another bottom is in place (I thought a bottom was in the making BEFORE last week’s earnings), but at this rate, the lows from last February are almost sure to get tested. (Click here for a review of the overbought conditions in FSLR’s stock prior to earnings and the massive and record short interest in the stock).
Be careful out there!
Full disclosure: net long FSLR