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  1. Yesterday
  2. The new update, recovery continues for some names, Looks like Sangamo, my only holding in this space, gained in fundamentals, based on updates around hemophilia A clinical trial tracking. Pfizer who is the partner, is going to take over IND for the product in Q1 2020, which adds validation for the gene therapy for Fabry disease. The stock has not followed. Number of events to take place in December including investor day on December 17th,
  3. I moved PEGI thread into M&A folder. Thanks
  4. I did not read the article so cannot comment on it. I imagine Hobo offers logical and analytical support for his outcomes. My view about Sunpower based on results of the company could not be more accurate, yet the market has kept the zombie intact to prove me wrong. My points in my articles were always logical, but logic is not necessarily mother of success in the market, certainly not in a short term. The emotion is. SPWR is splitting its unprofitable business, which I think allows it to be absorbed into fog of nothing in time. In a short term there is an excitement that parts of zero will produce better result than zero. I do not buy it, and I have not bought SPWR having a future for likely a half a decade. Yet the company is still here. Canadian Solar did pretty much everything right, it is one of most profitable companies in solar universe for period of 10 years, next to FSLR. I am sure someone could do a decade analysis on this to support my off cuff statement. Optics show that under $15 CSIQ is much more attractive than FSLR. Yet the chances are FSLR will be gaining here and FSLR will linger down to $12. CSIQ transitioned every piece of plan into action, modified it but managed. Since the prophecies about Canadian plants sold and disintegration of CSIQ as inevitable soon after, they won in Japan, won in Brazil, won in Mexico. Finally, they won in the US despite another prophecy about leading to bankruptcy acquisition of Recurrent. Still for someone who got up from a decade-long coma and looked at the company today it remains as never fulfilled opportunity. This is the issue for solar as whole. A paradise for traders but nightmare for long term investors.
  5. I thought you were long this stock?
  6. Looks like I was right on FSLR heading down bankruptcy lane. They started with the first round of layoffs. Hate to say "I told you so" but you guys just wouldn't listen to me. https://www.bizjournals.com/phoenix/news/2019/11/13/first-solar-lays-off-valley-employees-after.html
  7. Last week
  8. They have big qoq cash swings because of the project nature of the business, specifically in Q3 they spent a lot of cash on the build out of the SCE projects which they plan to get paid for in Q4. End of year net cash guidance is 1.7-1.9BN: https://s2.q4cdn.com/646275317/files/doc_financials/2019/q3/Q3-2019-Earnings-Call-Presentation-FINAL.pdf But I figure you know all that already 😉 1800M + 350M (2020 earnings) + 250M depreciation = 2400M = $23/share A fair valuation at the end of 2020 imho would require adding the above net cash to whatever valuation you assume from earnings. You may deduct some to account for capex but you would have to raise your valuation of operations by at least the same amount assuming they only expand capacity at positive NPV. Also whatever is left of project assets end of 2020 needs to be added assuming this monetizes 1:1 as cash at 0 margin. As you can see it's not as simple as coming up with an EPS figure and slapping a PE of X on it. This is also the reason why FSLR has been trading at relatively high valuations relative to peers, the market values the net cash on balance sheet.
  9. The company has over $1B in project assets. When these sell the revenue will add to the net cash position, whether as cash or by removing debt from the books. In addition, the $2B spent on factories is starting to depreciate, leading to a rather sizable positive cash flow boost. After this quarter FSLR has only around $100M left to spend on building the factories. Cash flow will grow significantly over the next two years.
  10. Net cash right now is $16 a share. I doubt I forcast them making $7 a share. They actually had a negative cash of $500M in Q3 and a net negative cash of $300M+. With more manufacturing ramps, more cash burn.
  11. They will have around $23/share in net cash at the end of 2020 with your numbers. How do we account for that. Or is the company worth only its net cash balance and the rest (technology/ops) is worthless?
  12. Have you read the article though? Their A series will be helpful towards profitability and also their poly contract will be over by end of next year which will also help their profitability. Wouldn’t this change their negative shareholder equity?
  13. If the exemption is removed the drop will be minimal short term. If the tariffs are removed, the stock could drop 50% in a week or 2. Pure speculation but looking at them with $1 to $1.50 a share in earnings in 2021/2022 and a PE of 20, you have a $20-$30 price range. That would be the near term downside risk. That is much more than the upside to $80 a share in stock.
  14. I don't think of nor do I care about Sunpower and articles professing short term hopes and dreams . They have negative shareholder equity, are selling off their manufacturing. Their proprietary tech is too expensive and only survives in a niche protected market. They go to outside contractors to manufacture. That says enough about their costs. As hobo notes, his estimates are twice that of analysts and are non GAAP and do not consider stock options/bonus or inventory write downs or even the spin off of the manufacturing business unit.
  15. This timeline is true for the impact on the business. The question is, what would be the impact on the stock price? Given historical precedent, any such announcement will have an immediate, possibly dramatically negative effect. That is the ultimate risk to an investor. Now again if history is any indicator, any such selloff may turn out to be overdone, and offer a good ENTRY point into the stock. But that would be at a significantly lower price than today. So for now, there is a good argument to be made to stay on the sidelines with FSLR until we get a clearer picture of what their future will actually be.
  16. Speaking of SPWR, do you feel like they’re turning the corner? What do you think of the recent article by Investing Hobo on seeking alpha about SPWR heating up towards profitability? Thanks
  17. What do you of Investing Hobo on his latest article about SPWR turning to profitability on Seeking Alpha? I don’t know how to post it here.
  18. 2020 - FSLR with tariffs in place $3.3 2020 - Bifacial exemption lifted - $3.3 Impacts on earnings come 2021 if bifacial is removed $2 in EPS Impacts on earnings come 2021 if solar tariffs are removed $3 in EPS. As I have noted, the impact is over 3 years. An immediate removal will not cause an immediate impact. It's impact would be gradual over the next 2 years.
  19. OK so for CSIQ you see $2-$4 in EPS next year. What do you see for FSLR with and without bifacial tariff? Greatly appreciated.
  20. My comment was not purely fictional but is a near term risk assessment based on factual process going on. It is based on near term legal wranglings in the U.S. courts today for the protected market that FSLR is completely dependent on. https://www.greentechmedia.com/articles/read/court-temporarily-halts-withdrawal-of-bifacial-exclusion FSLR has acknowledged that Bifacial modules has some advantages in certain market segments vs their products. These market segments are in fact First solar core market of Commercial Rooftop and Ground mount. There was a recent court ruling staying the revocation of the exemption for Bifacial modules. A court stay, generally suggests that there may be merit to the lawsuit. The Trump administration has a habit of taking actions with little science behind the reason. That is why they are loosing many fights in court. Precedence was set by allowing Bifacial modules into the U.S. tariff exempt.. Reversing that requires justifications built on data. If the courts rule that the reversal of the exemption was not based on any hard data then it may overturn the tariff. If that happens then that opens up FSLR protected market to price collapse next year as most Bifacial products will flood into the U.S. wiping out the $0.34 pricing that FSLR seems to imply they have. You/I also do not know what is being negotiated as far as a trade deal with U.S. China. China could be demanding a removal of all tariffs including solar tariffs as part of that. We just do not know that as of now(speculation). Trust me Trump wants a trade deal he can claim victory on for the election coming up. That means something will happen by April/May if not sooner. If(specualtion) that includes removal of solar tariffs, watch out. FSLR is fine saying they have contracts, but if customers see a significant market shift of up to 15% in their cost to build they will be asking FSLR for price adjustments that may actually be written into the contracts. Just ask LDK how well take or pay contracts worked. Those are the risks that I am basing my comments on. They are real and in the courts today as well as being negotiated in trade deals. Whether that impacts 2020 is yet to be seen but the comments of mine was with respect to the 11.4GW of contracts suggested through 2021 and into 2022.
  21. My script doesn't apply here because in our CSIQ discussion I was estimating likely numbers for 2020 based on my experience of the industry and what I know of the company and current market condition. Based on that I see margins of 15% or below for their module business in 2020. Your script on the other hand is a purely fictional "what if" exercise to show where GP would fall if FSLR's ASP was 24 cts next year. Fun but fictional. Don't really know what you want to accomplish with that. FSLR would be in serious trouble in this fictional scenario. That's a no brainer and an old hat. It may scare people who know nothing about FSLR and who are not able to realize that an ASP of 24 cts in 2020 is fictional. FSLR will have to compete without tariffs at global market prices one day, but that will be at a different efficiency and cost point relative to where they are right now. I value your opinion a lot, but if you want to pick my brain and influence my opinion you have to go beyond fuzzy fiction and get quantitative. A key question you could help address would be the likely impact of reinstating the bifacial exception on the 2020 / 21 EPS of the company taking into account all moving parts, i.e. a.o. how fast the necessary cell lines in southeast asia will be ramped, how fast shipments to the U.S. will ramp, by when a critical volume of XGW of shipments will be reached to impact pricing significantly, what fraction of customers are likely to renegotiate, what fraction of contracts will be rescinded with penalty payments, how fast production cost will fall to counteract some of the possible ASP decline, etc. etc. I personally think it will take many quarters for the string of prerequisites to materialize to have a significant impact on EPS. For starters current cell capacities in SE asia are very limited and players will be hesitant to invest their scarce money to add new lines and adjust the current lines given the volatility of the tariff decisions.
  22. The company planned on spending $120M on startup (OPEX) and ramp (COGS) expenses. The original plan was for $95M startup and $25M ramp. When the factories went into production earlier than expected this changed to $45M startup and $75M ramp. OPEX is not used for gross margin calculations so this shift cause the GM to drop. Most of the factory costs will be considered a cost of goods sold and so will have little impact on OPEX. From the 10Q, "In addition, our cost of sales includes direct labor for the manufacturing of solar modules and manufacturing overhead, ...depreciation of manufacturing plant and equipment, facility-related expenses, environmental health and safety costs, and costs associated with shipping, warranties, and solar module collection and recycling (excluding accretion). " First Solar differs from the c-Si companies because it considers shipping, warranty and recycling a COGS rather than an operating expense.
  23. Make up your mind as to what starup expenses you are using is it $20-$30M, $40-$50M or $70-$80M. As for my $440M what do you see expenses at next year when they are running a U.S. factory at full bore as well as several oversees factories and still ramping capacity?
  24. Once again, you are arguing in bad faith. First Solar predicted gross margins of 20-21% on its guidance call last year. This included $20-30M in ramp costs. Last quarter the company predicted the annual margin to be 19-20% with $70-$80M to be from ramp costs. Take the ramp costs out and margin guidance has gone up.
  25. When you say the company has Opex and Interest of $440M it is clear you are not arguing in good faith. First Solar expects to have Opex of $320-$370M this year which includes $40-$50 in startup expenses and EPC overhead. As for interest, the only debt the company has is for foreign projects and that is more than offset by the income of the cash position. If the company has debt then it also has systems revenue you are intentionally ignoring.
  26. First Solar has guided gross margins down 10% this year form their original 21.5% GM initially for 2019. Don't say their executions have been flawless.
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