SOLAR ER UPATE 7/28
Thanks to betterup of Yahoo for this resource!
Wednesday, July 30, 2008
I have to say, I'm not a fan of FSLR's particular technology, CdTe, because of the whole Tellurium Scarcity problem, as well as the Cadmium toxicity.
As evidence of this, I'll point out a line on their Q2 report.
Under "Liabilities," "Accrued collection and recycling liabilities" are shown as $23.5 Million for the Quarter. This compared to $69.7 Million in Net Income. One of the goals mentioned in the CC, was that they had produced their 500th Megawatt in Q2.
Essentially, the two big problems of CdTe lead to a company that MUST recycle the vast majority of their product for its lifetime. They MUST have that source of Tellurium, and in order to do business in places like Germany they've got to deal with their toxins at the end of a product's life. That could potentially lead to an increasingly expensive infrastructure required to support an increasing number of installations, which will be distributed widely around the planet.
I guess my hope would be that a big chunk of this expenditure is for the set-up of a recycling facility, and is a one time cost. What happens years down the road when FSLR has many GigaWatts of installed capacity?
On a totally unrelated note, it seems that they state in the CC that Conversion efficiency has increased by 10 "basis points," or .1%. I'm sorry, but that's peanuts. When asked about whether their newer facilities were producing more efficient modules, they replied that the 10.7% figure that they had been using was just an average, and that the actual efficiency varied, and they confirmed that 10.7% was the average at all of the facilities.
Based on this, I'd be very curious what kind of mid-term increases they are expecting in Conversion Efficiency, because otherwise it looks to me like they're close to "stalled."
As I've said before, just because I have a hard time believing in the fundamentals of this company, I wouldn't be shorting it unless I was willing to lose alot of money, at least in the short to mid term.
Disclosure, I have no position on First Solar.
Note: For more background on FSLR, See this.
Tuesday, July 29, 2008
The Big Question: What is short selling, and is it a practice that should be stamped out? From the Independent. Found by Zbuxster of Yahoo.
"If all goes according to plan, the investor is paying less to buy back the shares than it received for selling them. There are some costs involved, notably that the lender charges a fee for loaning out its shares, but in an ideal world the shorter still makes a tidy profit.
There's a variation on this theme, known as "naked short selling" – a form of shorting where the investor doesn't even bother to borrow the shares it is betting against. This is possible because share deals are often not settled immediately. The seller promises to deliver the stock after a short delay – say three days. If a short seller buys the stock back before it has to make good on the original delivery, no shares need actually change hands."
Here's something that I haven't really seen discussed.
When a short seller borrows shares from someone, they have to pay interest on those shares.
What happens if a Hedgie Naked Shorts? Who do they pay interest to? I think the answer is "nobody." They don't borrow shares, they pay no interest. This means that there is an actual financial incentive to Naked Short as opposed to sell a Covered Short. It's cheaper to Naked Short.
Really, I'd think that logically, even assuming that naked shorting were legal, that the naked shorter should owe interest to the BUYER of that FTD. Really, it could be said that the person that sold the share, but didn't deliver, is actually borrowing a share from the BUYER.
Not sure of the reason at this point, though there is rumor of beneficial activity in Spain.
Activity in Japan right now at the very least.
"Japan will also increase the use of solar power tenfold by 2020 and 40 times more by 2030, while forging ahead with plans to build nine more nuclear reactors by March 2018."
Barrons on SEC and Short Selling.
Here's an article on Short Selling from the Magazine that added gasoline to the Fire brought to LDK by Charlie Situ.
This is the Magazine that implied that LDK was the next Enron; the same Magazine that put their readers deep underwater in a short position against LDK of Gigantic Proportions.
They consistantly merge "Short Selling" with "Naked Short Selling," to confuse the uninformed reader, and to preemptively counter the SEC's new regulations on Naked Short Selling. If you read enough Wall Street Media articles on this issue you'll see the same thing, over and over. Liers, one and all.
Check out the following statement from Barrons: "Short-sellers read Barron's with special interest, and they also make good sources of information that our reporters can check and publish if true." LOL! I must say, it would better for everyone involved if Barrons actually had checked their facts on LDK prior to sending Waves of Short Attackers after the Company. Hell, even after LDK has been cleared of the charges, I've not sen any indication that Barrons has acted to correct the record.
Barrons has no credibility; they are the FOX News of Investment Media.
Their commercial states that the average portfolio of Barrons Readers is 3.2 Million Dollars. I'll be interested in seeing the updated stats when LDK and Chinese Solar squeezes them the hell out.
Monday, July 28, 2008
Solar lobby hopes bill has 9th life. Credit to IBCNU of Yahoo for the link.
Congress Blows Hot and Cold Over Tax Breaks for Wind Energy. Credit to IBCNU of Yahoo for the link.
Baucus Unveils Enhanced Extenders Package (S.3335).
Wonk Room - The Assault On Gore — And On The American Dream.
Daily Kos - Partially clears up Housing Bill Confusion.
McCain is moving away from support for Cap and Trade.
Salon on Energy Efficiency programs, and their huge returns on Investment.
Hedge Funds May Post Worst Month in 5 Years as Bank Bets Sour.
Sunday, July 27, 2008
The Nuclear Regulatory Commission says The Reactor Revival Is NOT Ready For Prime Time
"A devastating blow to the much-hyped revival of atomic power has been delivered by an unlikely source—the Nuclear Regulatory Commission. The NRC says the “standardized” designs on which the entire premise of returning nuclear power to center stage is based have massive holes in them, and may not be ready for approval for years to come."
Credit to mgraffis of Yahoo for the find.
Friday, July 25, 2008
LDK Solar will purchase furnaces used in the manufacturing of multicrystalline and monocrystalline ingots
"Under this contract, LDK Solar will purchase furnaces used in the manufacturing of multicrystalline and monocrystalline ingots for installation in its manufacturing facilities in Xinyu City. With the world's largest current ingot loading capacity of 800 KG, LDK Solar expects these furnaces to reduce the Company's electricity consumption and capital expenditures, while increasing production efficiency. Delivery will commence in 2008, and extend through 2010. LDK Solar is granted the exclusive right by JYT in purchasing and using this new equipment for the contract period. With this additional equipment, LDK Solar expects to reach 3.2 GW of annualized wafer capacity in 2010.
JYT Corporation, located in Beijing, China, is a leading manufacturer of solar and semiconductor equipment. Its products include float-zone crystal growers, Czochralski crystal growers, polysilicon reactors, directional solidification furnaces, Bridgeman crystal growers, etc. In 2007, JYT produced and sold approximately 600 silicon crystal growers. It is believed that for the past a few years JYT has produced more silicon crystal growers for the photovoltaic and semiconductor industry than any other companies in the world. Our company has passed ISO 9001:2000 certification, and for many years in a row has received the Science and Technology Progress Award from the government. Our products have been exported to USA, Korea and Chinese Taiwan, etc. The revenue of JYT in 2007 is approximately 600 million RMB."
800kg Ingots??!! Twice as large as their previously developed 400kg ingots. 3.2GW by 2010??!! Holy...!!
Not only this, but LDK now has a THIRD relationship with a Poly Reactor Supplier!
It seems that JYT has gotten a sweet deal from LDK in their 800kg collaboration. After this contract completes, then JYT can spread that equipment across the market, but for now, it's all LDK's.
Note: It appears that this was broken on the Yahoo Board yesterday from Chinese News releases. Honestly, I didn't think too much of it, I just figured it was something we'd hear more about in a few months. Nope, they've already got it in business!! Kudos to the board for ONCE AGAIN breaking news!
Once again, LDK is demonstrating that they are moving at Light Speed, and developing beneficial relationships with trading partners to not only serve their immediate business, but also to build redundancy into their incoming supply lines of critical factory equipment.
Thursday, July 24, 2008
What the SEC Really Did on Short Selling
"Who profits from intentionally false information in the marketplace? Those who are in on the scam and positioned to benefit from the predictable response of people who believe the fraudulent information to be true.
The classic "pump and dump" scheme, in which a stock is inflated through false information and then dumped on unsuspecting investors when the perpetrators flee, is one example of how this works. "Distort and short" is the same thing in reverse.
"Naked" short selling can turbocharge these "distort and short" schemes. In an ordinary short sale, one borrows a stock and sells it, with the understanding that the loan must be repaid by buying the stock in the market (hopefully at a lower price). But in an abusive naked short transaction, the seller doesn't actually borrow the stock, and fails to deliver it to the buyer. For this reason, naked shorting can allow manipulators to force prices down far lower than would be possible in legitimate short-selling conditions."
"Although the Commission's order was issued under emergency authority in unusual market conditions, it is based on several years of experience and analysis. In 2004, the SEC adopted Regulation SHO to attack the problem of naked shorting. It requires broker-dealers, before they accept short sale orders or effectuate short sales in their own accounts, to first borrow the security to be shorted, or enter into a contract to borrow it.
But Regulation SHO also offers an alternative to these requirements if the broker has "reasonable grounds" to believe that the security can be borrowed. This could create opportunities for evasion of the rule's purpose.
That has led the commission to consider simply eliminating the "reasonable grounds" alternative altogether. This is essentially what the SEC did for the financial firms for which the American taxpayer is now on the line. It is also what the commission is even now considering for the broader market."
Good stuff. Very hopeful, and Right On in philosophy.
Key Phrase: "Although the Commission's order was issued under emergency authority in unusual market conditions, it is based on several years of experience and analysis."
Wednesday, July 23, 2008
No Messageboard yet.
I'm thinking that it's a Strong Buy, though it is complicated by its relationship with LDK Solar. See GT Solar, from an LDK Long's Perspective.
Do your own DD, and be prepared for suprises.
Edit: Note to GT Solar Investors.
If you are interested in SOLR, then you need to check out LDK Solar, as they are closely connected. LDK is GT's biggest customer, both in PV Equipment and in Polysilicon Manufacturing Equipment.
Buy and Hold. Do not expect immediate returns. LDK is under continued Short Attack, the rationale for which is based on their future ability to manufacture Polysilicon (using GT Solar's Equipment and Support (see link, above)).
Don't let them shake you out if they drive it down. Look at the Fundamentals and the Growth of this company, and you'll see that it is incredibly cheap. When it breaks, it will break big. They won't announce that moment beforehand, so just sit tight on some shares, preferably in a Cash or 401k Account.
Feel free to ask any questions you might have, and I'll give my take. However, note that your decisions are your own responsibility and your own risk. I'm not a pro, I've just made a particular study of this company and industry for quite some time. Everything I say could be completely and utterly wrong. Do your own DD.
Here's a link to my LDK Tag, which contains about everything I've ever written about LDK.
Ok, this is what I've dug up.
The House version that just passed is the "American Housing Rescue and Foreclosure Prevention Act of 2008 [H.R.3221.EAH]"
It contains references to Section 864 of the Internal Revenue Code of 1986.
The Senate Version that had been voted on previously is the "Foreclosure Prevention Act of 2008 (Engrossed Amendment as Agreed to by Senate)[H.R.3221.EAS]"
Both Versions refer to Internal Revenue Code of 1986. The House Version refers to Section 864, which is not what we're looking for. What we're looking for is a reference to Section 48, which is referred to in the Senate Version.
I think that the link posted earlier was the Senate Version.
Reid has said that there will be no changes to the House Version in the Senate.
So, Don't count on anything from Congress.
I've been through so many links and versions, it's not even funny. I can't possibly recreate the exact correct links.
Here's what appears to be the House Version, but I can't guarantee that it's the most recent House Version: http://www.govtrack.us/congress/billtext.xpd?bill=h110-3221
Here's US Code Section 48, which is the relevant code that needs to be extended, but is not in the House Version: http://uscode.house.gov/uscode-cgi/fastweb.exe?getdoc+uscview+t26t28+78+0++%28solar%29%20%20AND%20%28USC%20w%2F10%20%2848%29%29%3ACITE%20%20%20%20%20%20%20%20%20
Freakin' Pussies in Congress. The best thing that could be done would be to help homeowners to pay for products that would add a new kind of value to their ailing properties, and save them money in the long term, also.
Tuesday, July 22, 2008
Monday, July 21, 2008
Direct competitors with LDK, though not nearly so well scaled up in wafers, though ahead in Poly.
They do business with Solarfun, Trina Solar, and JA Solar.
What does a GT Solar IPO mean for LDK? Updated 07/23/08.
Well first some basic info.
The ticker will be SOLR, and 30,300,000 shares have been priced at $16.50. The company gets nothing, the money goes to Investors via a Dividend. So, someone is collecting cash; about $500 Million; and the company is left with a $2.3 Billion Market Cap. It would be the largest Solar IPO in the US.
Here's the Prospectus.
Moneycurry (link below) points out the separation of Divisions of the Company, these being the PV Business and the Polysilicon Business.
Per Moneycurry, the PV Business has so far generated all of GT's revenues, with DSS Units generating 86% of '08 Revenues. Ok, that's fine. The PV Business is pretty basic stuff in comparison to the manufacture of Poly.
For the Poly Business, Moneycurry makes the statement "Although company had delivered reactors to one customer but due to its revenue recognition terms, company has yet to generate any revenues from this business segment, but is expected to generate significant revenues from this segment from current year onwards." So, how to interprete this? It seems that what they are saying is that they've made deliveries, but the equipment is not be up and running beyond a predetermined threshold.
The question is, will GT succeed in getting their system up and running for LDK?
Well, this question has been plaguing LDK for some time. At 62% of Sales (See Hoovers, below), LDK is the largest customer of GT Solar, not only for PV Equipment, but for Poly equipment such as CVD Reactors, and Converter Reactors.. The question has been, will LDK be able to produce Poly? Jesse Pichel, of Piper Jaffery, has consistently shed doubt on the possibility of success at LDK, and thus, maintains a sell rating on the Company. So, here we have Piper Jaffery and associates, taking part as Managers in this IPO of GT Solar as if it were a credible company, and yet simultaneously holding a Sell Rating on LDK Solar on the basis that its GT Solar-based Poly Production is at a very high risk of catastrophic failure.
This leaves room for several interpretations.
I'll start with the possibility that Jesse is correct, and LDK will fail either in their TCS Gas production as Mr. Pichel implied during a recent LDK Investor's Conference, or that LDK will fail in implementing a full "closed loop" Polysilicon Production Cycle, as he has implied previously.
In these cases, if Jesse is correct and LDK fails, then GT Solar will be a loser. Whether LDK fails due to TCS production issues* (provided by LXE and CDI), or due to a failure to implement their Closed-Loop Reactor System (provided by GT Solar), GT Solar is in big trouble. Remember, LDK is 62% of GT's Sales. It doesn't matter how LDK might fail, if they do, then SOLR gets hit by a meteor.
And yet, here we have PJC taking part in the IPO of a company which is highly dependent on a Trading Partner which their own Analyst is suggesting will crash and burn. Does PJC think that they are selling shares of a stock that will go up, or down? I'm no Lawyer, but I can't help but think that there might be some legal jeopardy in selling shares in an IPO of a company where prior knowledge of impending failure of that company is had by the seller, particularly if the cause of that failure is due to the known inability of that company (GT Solar, in this case) to successfully fulfill their own contracts for equipment and support.
Of course, I wouldn't believe that an Outstanding Company like Piper Jaffery would take part in any IPO of less than Stellar Quality. LOL!
This brings us to another possibility; that LDK will succeed as planned in implementing their complete solution, from TCS to Poly. In this case, GT Solar, soon to be a Public Company with the responsibilities associated with the Sale of those Public Shares, will have delivered on their agreements with LDK, but also with other Companies with whom they've made similar agreements such as The Silicon Mine B.V. of the Netherlands, and Aziel Holdings Limited of Russia.
It is this case which would support the Integrity and Credibility of Piper Jaffery in their backing of GT Solar, and in their part in this upcoming IPO. It is also the most profitable outcome for everyone involved, as GT Solar is in a sweet spot in the Poly Production Industry. If they succeed, then they will stand nearly alone** in the poly production equipment niche in a rapidly growing Solar Industry. Though there are other companies that have the technology to do what GT is working to do, those companies are typically focused on their own production of Silicon, as opposed to selling equipment to others that would like to.
Only time will tell, of course. The Stakes are high, not only for all the parties directly involved in LDK and GT Solar, but also for all of those parties that are depending on the multiple GigaWatts worth of Solar Wafers that are due to be pouring out of LDK's Factory next year and beyond.
Other Sources of Info:
1. www.moneycurry.com - IPO Review
2. Article - GT Solar hopes sun will come out this week
5. Article - Solar technology company opening Houston engineering office
* According to this article by Photon Magazine (sadly, in incomplete form), the key incredient to the production of poly is not in the capacity for TCS production, but is in the Converter Reactor used for the recycling of STC to TCS gas from the output of the CVD Reactor, in which the Silicon Crystal is being grown. It is this critical piece of the Chemical Process that is being provided by GT Solar, and it is GT Solar that is on the hook for the successful implementation of their own equipment.
** Moneycurry does make one error when they claim that GT Solar has no Competitors. In fact, per GT Solar, they do have a competitor by the name of "MSA Apparatus Construction for Chemical Equipment Ltd." Oddly enough, LDK also seems to have a relationship with this company out of Germany, and has been buying up "MSA Reactors" for their 1000MT Poly Plant.
Sunday, July 20, 2008
Friday, July 18, 2008
Thursday, July 17, 2008
"``Without a market-maker exemption, I could see this having a profoundly negative impact on the liquidity that would be provided in stock and derivatives,'' said Steve Sosnick, an equity risk manager in Greenwich, Connecticut, for Timber Hill LLC, one of the largest options market makers in the U.S. "
SEC Poised to Exempt Market-Makers From `Naked-Short' Sale Ban
Yeah, now what is he talking about when he talks about liquidity? He's talking about the fact that if this goes through, there might not actually be enough shares of stock to go around. You know what that means folks? It means that prices go up.
That would be TERRIBLE!! Imagine all of those 401k's with their suddenly more valuable shares of stock. JUST IMAGINE!
EDIT: He did it.
Wednesday, July 16, 2008
I got a call today from our Insurance Company wishing me a happy b'day for later in the month, and wanting to set up a call with one of their guys with me to talk about my financial future.
I had a wicked thought.
I suggested that Sean could give me a call, but I wanted to hear about Insurance info surrounding Solar and Wind Installs. Oh, well, apparently Sean is more of a "Finance and Investing" guy, but Ashley will call me about that. So, I continued that in that case, I'd like Sean to call me prepared to talk about Green Investing.
They will all think I'm crazy, but that's OK. They'll learn something about Green before the call, and they'll learn more after. I'll learn too, so that's great!
This one was random, but I've had an Idea for some time to go to my Credit Union and talk to them about programs that they have or would develop for Green Lending. For you folks that want to "Activate," there's an idea for you. Put pressure on your Banks and Financial Services to develop programs to support Individual Purchases of Greentech, etc. There are alot of possibilities for programs that they might not have thought of, but that very well might make them solid and secure profits long-term. Ask them about what programs they've got, and if they've got none, ask them what they're going to do about it. Remember, Home Energy Solutions have real long term value. They're relatively safe loans, so it's very much in your bank's best interest to get a piece of that market.
Tuesday, July 15, 2008
The European Market Countdown is excellent. It's often an outsider's view of the US Markets and how they're affecting the World Markets.
There's one fellow in particular, Roger Nightingale, that if you catch in Interview, you gotta stop and watch. I've heard him twice now suggest that some US Bankers need to be put in jail. That kind of honesty is worth pausing for.
Monday, July 14, 2008
Sunday, July 13, 2008
The Pickens Plan Main Page.
There are videos, discussion groups, etc. He's obviously trying to build up a heck of a network to support his plan.
Pickens Before Congress - Video.
The most important part of The Pickens Plan for Solar, is that he ties the VALUE of Solar Directly to the value of Natural Gas and Oil for use as Transportation Fuel.
No longer can anyone use the argument that Solar doesn't run their car. Under the Pickens Plan, Solar (and Wind) are used to offset Natural Gas, which can be used to run a Car, which, if used in this way, directly offsets the use of Oil, which would ordinarily have been used to fuel that vehicle.
We're directly tied into Transportation Fuel now.
Petrobras Oil Workers Strike; Production Cut Expected
Brazil's Oil Workers Confederation began a five-day strike against Petroleo Brasileiro SA, the country's state-controlled oil company, an action that may cut Brazilian daily oil output by more than half.
Saturday, July 12, 2008
Friday, July 11, 2008
Wednesday, July 9, 2008
Peak coal: sooner than you think
"Looking to the future, many analysts who are concerned about emerging supply constraints for oil and gas foresee a compensating shift to lower-quality fuels. Coal can be converted to a gaseous or liquid fuel, and coal gasification and coal-to-liquids plants are being constructed at record rates.
This expanded use of coal is worrisome to advocates of policies to protect the global climate, some of whom place great hopes in new (mostly untested) technologies to capture and sequester carbon from coal gasification. With or without such technologies, there will almost certainly be more coal in our near future.
According to the widely accepted view, at current production levels proven coal reserves will last 155 years (this according to the World Coal Institute). The US Department of Energy (USDoE) projects annual global coal consumption to grow 2.5 per cent a year through 2030, by which time world consumption will be nearly double that of today."
Tuesday, July 8, 2008
Pickens wants more emphasis on alternative energy
'"I don't have any profit motive in this. I'm doing it for America, that's my point," he said in the meeting with the AP.'
YES! This is a man on a mission. He's 80 years old, and he's going to "save the day."
You can bet that many will follow him as he's setting the course. Some of these followers will be in Oil. They'll have to transform their thinking, and their investing.
Pickens has a focus on Wind, but he also mentioned Solar on CNBC.
He's the man with the plan.
Sunday, July 6, 2008
Thursday, July 3, 2008
Wednesday, July 2, 2008
I ran across this page by World Nuclear Association.
Coal is an extremely important fuel and will remain so. Some 23% of primary energy needs are met by coal and 39% of electricity is generated from coal. About 70% of world steel production depends on coal feedstock. Coal is the world's most abundant and widely distributed fossil fuel source. The International Energy Agency expects a 43% increase in its use from 2000 to 2020.
There's one more reason why Coal isn't the best option. As we're burning coal in an incredible frenzy, and as the price goes up in response, inflationary forces result from both the increased cost of the Energy Produced, but also by the increased cost of steel, which is the basis for so many critical products in the Economy. Increasing prices of Silicon, on the other hand, should have a weaker impact on critical goods, which has pretty much been demonstrated by the increase in silicon prices over the last few years as compared to the relative lack of increase in price of silicon-based computing products.
A reference to "GEC Graeber Engineering Consultants GmbH"
Nice article about the Poly Industry, though it's not in a complete form.