Wednesday, April 30, 2008

Spire makes a sale. Nice!

Spire to Build Manufacturing Line in India.

They're basically in the same line of business as AMAT, in terms of selling factories to those that want to get into the Solar Manufacturing Business. They seem to be having some success.

Tuesday, April 29, 2008

AMAT Sunfab Thin Film Line Brochure.

BTW, here's the sunfab line.

Best Energy, AMAT, LDK, Xiaofeng Peng.

The LDK Investors Group has put out an update, and Greentech Media has a followup.

Regarding the mystery deal between AMAT and a Chinese Company, per the article:

Xiaofeng Peng, the founder and CEO of LDK has set up another independent company called Best Solar and it is this company which has signed the deal with Applied Materials.


It's interesting. We've known that there was a deal with some mystery company in China for some time now, and Conor's group has broken the story.


There is alot that could be said about the deal; there is significant room for conspiracy theories and intrigue. I'll speculate later.


What grabs me, upon reading the Greentech article is that here comes The LDK Investors Group, they bust open a story, and boom! Suddenly analysts with knowledge of the deal are coming out of the woodwork. Hmm, it seems that Jesse Pichel has a habit of selectively releasing information. Of course this is no suprise, analysts are paid for their information, and retail investors don't cut the big checks. It just goes to show, though, the nature of the game that is being played. Big Kudos and Thanks to Conor and his Group!


Ok, to speculation.


One, the possibility of Mr. Peng's involvement in a second, private company, sets off alarms. Not just due to dilution of his personal effort, but due to a potential direct conflict of interest, and possible skimming of LDK resources or profits to benefit the second company. This concern is assuaged somewhat if this company goes Public, but that's not a certainty.


I'm an optimist not only on LDK, but on the ethics of Mr. Peng and his Team, but I'll try not to discount the above risk out of hand.


A Couple of points in LDK's favor are:


- There is reason to believe that the majority of Mr. Peng's personal wealth is tied up in LDK. He doesn't have the money to make this huge deal with Applied Materials by himself. Where Mr. Peng is in absolute control of LDK, he can only be a partner, and likely a minority partner, in such a large secondary project.

- LDK is Mr. Peng's face. If LDK fails, then Mr. Peng loses that face. Especially after all of the insults thrown at Mr. Peng by Wall Street Analysts and Media Outlets, Mr. Peng is very likely driven to prove them very, very wrong. He won't do this by corrupting and destroying LDK.


Initial Conclusion: Mr. Peng has too much tied up in LDK to allow it to do other than succeed, and whatever plan he's spelled for the recent investors of $400 Million, surely includes an appreciating share price. Those guys probably knew about "Best Solar" long ago; it seems that in some circles this deal has been common knowledge.

I'd be much more worried if I were at FSLR, and saw a One GigaWatt Competitor on the horizon, and not only thin-film, but Silicon-based thin-film. As the price of Tellurium Increases, we'll be seeing the price of Silicon Decreasing. FSLR is going to have a tougher time scaling up over time, to fill the niche, than a silicon-based competitor.

As for LDK's Target Market in comparison to that of "Best Solar," they aren't necessarily in direct competition. The Niche filled by "Best Solar" is going to be in very low cost / low efficiency / large land area Installations; the same as FSLR. LDK's higher efficiency, smaller area panels will be applied in more densely populated areas, where space is at a premium.


So, I don't know, but these are some initial thoughts. I'll be very interested to see what additional details come out about "Best Solar" and Mr. Peng. We really do need to know what his capacity is with "Best Solar."



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A final thought on the subject is captured in a statement that I'll title as "the genius of Peng."

I consider the Sunways Deal to be an indication of Peng's Genius. Siemens Reactors aren't constructed in a day. If Peng had ordered the two reactors that are going in this month from scratch, there's no way that he would have had them near installed by now, but he managed to work his way into two reactors that Sunways had ON HAND.

This was a big first step in getting the jump on alot of Competition.

Next, GT Solar. LDK is the largest Customer of GT Solar, and the scale involved has got to be a significant portion of GT's capacity. What LDK buys from this young growing company, can't be sold to LDK's Competition.

Here's step two in depriving competition from accessing much-needed equipment.

Now, Applied Materials. "Best Solar" makes a $1.9 Billion deal with Applied Materials for Sunfab lines. To my knowledge, AMAT hasn't built any Sunfabs, and here's a Peng Enterprise buying up a GW worth. "Best Solar" must have some kind of priority over other potential buyers that might want some Sunfab Plants. Applied Materials isn't just going to be able to go from none to a GW in a month. There's going to have to be some dedication to "Best Solar's" order from some time.

Step three. Deprive Competition of Sunfab thin-film lines.

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Wednesday, April 23, 2008

'Cramer told caller Chris in Georgia that he would stay out of China energy companies such as Suntech Power, LDK Solar and Trina Solar.

"We are not playing with any of these," Cramer said. "We are staying out of China. We're going to keep out of China until we think that market has finally bottomed, and it hasn't."'


I see this position from Cramer, and I think, "what an ass."

Maybe he's not "playing with" them right now, but even if not, he knows that somebody is, and he probably knows who it is. Short interest on LDK has increased to over 2 Million short shares. It's outrageous manipulation. Ah well, when Cramer and/or his buddies decide that it's time to pull out of that short position, then all Hell is going to break loose.

12 day Chinese Coal Supply.

China down to 12 days worth of coal - report

CHINA only has enough coal for 12 days of consumption, three days less than a month ago, state media reported Wednesday, sounding the alarm bells over the nation's most important source of energy.

Found by Cardiakarrest of Yahoo.

Friday, April 11, 2008

New Gore Slideshow.

See the video.

Credit to Mom_Pop401k on the Yahoo boards for the find.

Thursday, April 10, 2008

$400,000,000 for LDK Solar, My Interpretation.

The part that I'm most concerned about is the $200 Million for Stock Buyback.

What does this do for LDK?

Really, I think it's great, and I'm saying "Buy, buy, buy!*"

This money gives Mr. Peng a hammer to use on short fingers. On the market, money is power. Until now, Mr. Peng didn't have a load of cash with which to balance the influence of Unfriendly Wallstreet Money.

$200 Million isn't alot of money, but it's sure significant.

At $35, that amount of money is equal to about 5.7 Million Shares of stock. Just the existance of that money in the hands of LDK acts as leverage against short interest. Short leaders must fear the prospect of dumping a large number of shares on the market, only to have them consumed by LDK instead of driving down the price and killing the momentum of the stock as the Short requires.

What can the unfriendlies do? Well, they can wait and hope that LDK screws up. If there are delays in the big three lines, then shorts can pounce. But even so, LDK can now respond. In the near term, though, a few random days of sucking up a few extra shares should give shorts some stress, and could start a round of short covering, particularly since at this time there are so many shorts already underwater. Remember what happened to Solf when it came off of the Nakes Short Threshold List.

Another current advantage that I see right now is that some group of individuals has just put $400 Million into LDK, on the faith that they'd be paid back on that loan plus interest (or in valuable shares). These people have new incentive to to be watching LDK's performance, and even that additional awareness of the company is likely to increase demand for the stock, as details on the parties involved filters out.

The key is momentum. If LDK can build up even the smallest positive momentum, it can potentially build to be self-sustaining over time, based solely on new Long Investment, allowing LDK to save their money for emergencies.

Let's get some momentum going.

As a final note, I should add that the great wildcard here is the performance of the overall market. I can't help but be very Bearish on that market, and it's a whole different question as to whether LDK can hold momentum if the market goes into another meltdown mode. We've just started Earnings Season, and the short term risks are high on that front, IMO. This doesn't hurt the long term, it just complicates the short to medium terms.

* The usual disclaimer applies. Do your own DD, and know what you're buying.

Update on New Jersey's Solar Financing Program.

As previously mentioned here.


PSE&G Receives Green Light to Launch Solar Investment Program.

PSE&G Solar Loan Program - Official Info Page.


I want my Credit Union to start a program like this.

Info on Today's Senate Vote:

Vote Summary

H.R.3221

Funds incoming for Algal Biodiesel Production.

Green Plains Renewable Energy approved for $2,190,407 grant for Algal Biodiesel

Teaser: "The United States Department of Energy estimates that if algae fuel replaced all the petroleum fuel in the United States, it would require 15,000 square miles (38,849 square kilometers), which is a few thousand square miles larger than Maryland."

Wednesday, April 9, 2008

Report on Munich Conference on Silicon Production by the LDK Investor's Group.

Great Data Here.

The Conference mentions producers of “Upgraded Metallurgical” silicon. Not knowing what that was, I looked it up. Here's a sample link.

FSLR and the Tellurium Fiasco.

It's interesting to see First Solar so well hyped, while the Tellurium issue goes undiscussed by the Investment Community. The possibility of a price spike in Tellurium has been discussed for some time over at the Stock Psychology Blog, and at that Author's posts at Seeking Alpha.

Here's his latest post on the subject.

It sure looks like there's a hell of a spike happening in the price of Tellurium. To me, it's reminiscent of what's been happening in Silicon, and it's just the kind of price movement that makes highly dependent industries struggle with competitiveness. The difference between Tellurium and Silicon, of course, is that Tellurium is incredibly rare on earth, while Silicon is incredibly common. With Tellurium, you can't just increase manufacturing capacity freely, because there simply isn't enough raw material of refine, whereas with Silicon, though refining is expensive, there is a vast amount of raw material available for as far as the eye can see.

Excellent News. Chinese Banks to invest in US Securities.

China Permits U.S. Investments

Chinese banks will be allowed to invest their clients' money in U.S.-traded stocks and mutual funds, China's banking regulator said after signing an agreement with SEC regulators. While China has been a major buyer of U.S. Treasuries, Beijing has had strict limits on foreign investing. Analysts expect Chinese investors will slowly, but steadily, begin trading in U.S. stocks.


Here's another link that describes this process.

Spire gets a helpful Contract out of China.

Spire Gets Contract for Combined Solar Module and Cell Line in China

The company said the order includes a 25-megawatt (MW) module factory and an adjacent 25MW solar cell factory designed to produce high efficiency multi-crystalline cells.

Jiangxi Gemei Sci-Tech expects that its vertically integrated solar facility will form the cornerstone of a new science and technology-manufacturing center in Jiangxi, a southern province in China.



I always liked their idea of selling turnkey facilities for manufacturing of Solar equipment. I figured that in a time when Solar Capacity had to be run up very quickly, that was a good business plan. Well, they seem to be having some success.

Tuesday, April 8, 2008

Somethings a-brewin' - LDK

News has been coming fast and furious from LDK (see).

Sold out for the next two years, new long term contracts, and now a $300 Million debt offering, and $150 Million Stock Buyback.

We may see some interesting action over the next few weeks, especially considering that the first poly plant (1000 MT / Year) is due to be complete by the end of April.

At last release, short interest was over 10 Million Shares, and we're still on the Naked Short Threshold List. Could we see a squeeze? I'm hoping so.

In addition, things seem to be going in the right direction for Solar right now. We have the Senate moving once again on an 8 year extension of Solar Energy Tax Credits, which, if passed, will put upward pressure on solar stock prices.

The wildcard that I see, is in the stability of the overall market. It's very possible that any positive news for Solar or LDK will be dwarfed by large magnitude writeoffs of debt by the financials, and the resulting drop in market values across the board. It seems that the International Monetary Fund suggests that we're looking at almost a Trillion Dollars in writeoffs, and we've not yet appoached this level of loss.

Tuesday, April 1, 2008

Community Reinvestment Act

This is the original law that brought us Securitized Sub-Prime Mortgages.

http://en.wikipedia.org/wiki/Community_Reinvestment_Act

The original law was passed in 1977, and it was modified in 1995 under Bill Clinton. The first Subprimes were Securitized in 1997, and the law was revisited in 2002 with changes occuring in 2005.

I remember Bill Clinton talking about how he was going to stimulate investment in Urban areas, particularly poor ones. He was somewhat successful in this, and I'm now thinking that this law might have had something to do with it.

So, is it to blame for today's problems? Was it a bad law, or bad idea? It would be tempting to throw Bill under the bus on this, considering that he's a political opponent at this point in time, but no, I think it was a sensible idea, and probably benefitted alot of very legit sub-prime borrowers since '97. On the other hand, it definately appears to have been taken too far, whether this was because the Government Incentive was so powerful that Banks would continue to fall all over themselves to rack up more Mortgage debt? Or did Banks take on this tremendous mountain of debt because they discovered that there wwere incredible profits in it... as long as the number of defaults remained very low.

Personally, I suspect that it was the profit motive for Banks, along with the convenience in distributing the Mortgages through Securitization, that caused the excess.