Canadian Solar IPO Has Gone From Bad To Worse

The free fall continues for Canadian Solar Inc. (Nasdaq: CSIQ) as the stock went down another 11.68% to close the day yesterday at $10.59. The stock is down almost 30% from its IPO price of $15. The stock went up to $16.73 on its opening day before starting its free fall .

I am not sure what is going on behind the scenes here.

The underwriters were:

IPO Underwriters (Source: IPOHome)

* Deutsche Bank - Joint Lead Manager
* Lehman Brothers - Joint Lead Manager
* CIBC World Markets - Co Manager
* Piper Jaffray - Co Manager

The decline could also be because of the following reasons:

* The company is not profitable.
* They only make Solar Panels.
* They buy solar cells from other manufacturers and assemble solar panels.
* As basically a solar panel assembler they don’t have any distinct advantages.
* Probably the worst solar stock out there among STP, SPWR, ESLR, FSLR, WFR among others.
* Five largest customer accounted for 91.2% of revenues for six months ended June 30, 2006.
* Competition seems to be increasing in the solar sector almost daily.

CSIQ 2-month chart: