Solar energy will grow 50% per annum for at least the next 5 years. Good portion of this company’s growth is from polyfilicon, main ingredient in solar cells. Currently 30,000 tn. of annual consumption is expected to grow to 100,000 by 2010. Expected cash flow next year is $.41 and he expects it will be $.79 by 2009. Very cheap.
The production quality and quantity never hit what they expected. They had all these customers they pre-paid and had to give back shares. He runs as fast as possible from this situation.
Used to follow it before the incredible run. There were always questions about the technology of the company. He doesn’t bite into something he doesn’t understand. He would steer clear of it.
Used to like this company a lot but doesn’t like it all now. Failed to meet expectations, kept running out of money and giving away shares to solve their pre-payment problems.
This is a long-term view that the price of oil is going to go up in the future. If that comes to be true, there has to be other ways to produce electricity. Solar energy is probably one of the best ways to do this. Almost every stock in the solar industry got crushed last year because of the drop in the price of oil. If you still believe in the solar industry for the next 10 to 20 years this is one that will be producing.
This has become a speculative situation. Market had thought their silicon production was going to be commercially viable and demand would be strong. There are now doubts about their process and that it is scalable.
They still need to get their act straightened out. Give it a few quarters to perform. Massive overhang in terms of the number of short sellers getting into it. Also some technical issues.