Suntech Power Holdings Co. Ltd. (NYSE:STP), one of my favorite stocks if not only for its performance as a company, but also as a great water cooler stock, is once again getting kicked around. As an Asian company in a hot/volatile industry, Suntech's stock chart is prone to looking like the ball bouncing around brick breaker (for the Blackberry fans out there).
Why is the price jumping around? Well, there are plenty of ways to speculate on this one, especially since there has been no major news on the stock. Are people getting more and more worried about the silicon shortage? Are falling oil prices weighing on the stock? Were buyers hoping for a quick pop in the price and just getting impatient? Are potential competing IPOs coming to market creating worries?
My guess is probably a little bit of all of the above. Even more so, though, I think that insiders continuing to sell off their stakes is having an impact on the stock. Due to the capital requirements to ramp Suntech to the scale that it went public at, the company raised a significant amount of money from outside venture investors. As those investors cash in on their fantastic investment, the stock has sagged a bit as the market got a bit flooded with supply. Just looking at my handy little Power E*Trade window, I noticed that on Friday another 300k+ shares were registered by an insider for sale.
Dry up some more of that supply and... well, we could see some movement northward.
In the meantime, though, I thought I'd share an article on Suntech that didn't make it up onto Yahoo! Finance. Given that this is a China based company, I think it's somewhat easy to look at it like a black box operation. I thought that this article from The Sydney Morning Herald, though, gives a pretty good background of the entrepreneur (Zhengrong Shi) behind Suntech and the vision that the company is executing on.
By way of conclusion, I'll just put a reminder here that I am a Suntech shareholder, and am not afraid to buy more if it dips back down too much lower!
STP Chart Since IPO