A-Power Energy (NASDAQ:APWR) is plunging more than 10% in early trading this morning after it announced it had received a demand for arbitration from General Electric (NYSE:GE) for alleged breaches of contract related to gearboxes for wind turbines.
A-Power indicated it hasn’t decided how to respond, or what impact arbitration would have on its financials.
For those that follow APWR, you might remember that back in December there was some confusion about statements made by the APWR CEO related to this deal. First he said the company was interested in buying GE China’s stake in the wind turbine gearbox venture and terminate the supply deal. He then retracted the statement, saying he’s confident in GE’s ability to produce the gearboxes. The relationship appeared on shaky ground then and now it appears this is a marriage on the edge of the cliff.
Is this an opportunity to pick up shares of APWR as it gets close to retesting the lows set a few months ago? Possibly, but it’s too soon to tell. I’d want to see how the stock closes today and if it needs to retest the lows. I also want to see what kind of earnings APWR reports on March 30th. This is a company that has failed to deliver many quarters in a row.
Disclosure: No positions