First Solar CEO leaves, shares drop 25%
Stock falls to lowest level since 2007 on top of steep decline
By Steve Gelsi, MarketWatch
Oct. 25, 2011, 4:37 p.m. EDT
marketwatch.com
NEW YORK (MarketWatch) — Shares of First Solar Inc. lost a quarter of their value and dropped to their lowest level since 2007 on Tuesday after the departure of Chief Executive Rob Gillette touched off speculation about the health of the solar-panel maker. Giving no reason for the change, First Solar FSLR +0.09% said Gillette “is no longer serving” in that position, effective immediately.
Mike Ahearn, First Solar’s chairman and founder, will serve as interim CEO as the company conducts a search for a new CEO, the company said. See Special Report on Mike Ahearn.
Shares of First Solar fell $14.68 to close at $43.27. The move down comes on top of a tough year for First Solar as the only pure-play solar panel manufacturer in the S&P 500 SPX -2.00% faces a price war on solar panels and uncertainty around demand from Europe, a key market.
“This is not a good sign,” said Gordon Johnson, head of alternative energy research and managing director of Axiom Capital Management Inc., said about Gillette’s departure.
“It’s more difficult for First Solar to compete now since the price of traditional crystalline solar panels have come down so much,” he said.
A First Solar spokesman declined to comment further on the move. Gillette took over as chief executive of the company on Oct. 1, 2009, a spokesman said.
In another setback for First Solar, reports surfaced this week that the company’s talks to sell its $2.2 billion Topaz solar project to Enbridge ENB +0.37% have faltered, Johnson said in a note to clients.
First Solar said recently it did not win a federal loan guarantee from the U.S. Department of Energy for the Topaz project.
In another sign of the tough market conditions facing solar companies, U.S. solar panel makers last week filed a trade complaint against China for artificially pushing down the price of solar panels in the U.S. to win market share. See: story about solar panel trade dispute.
Already, First Solar shares have fallen sharply this year as investors fret about competition in the solar panel arena.
In May, hedge fund manager Jim Chanos of Kynikos Associates Ltd. said he’s shorting shares of green energy companies, including the First Solar, according to reports about the Ira Sohn Conference in New York. See story about solar shake-out.
Steve Gelsi is a reporter for MarketWatch in New York.
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