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    • Mon Nov 19th 14:50 PM | Rating: 0 0
      Commented on:
      First Solar Vulnerable to a Tellurium Shortage?
      I don't know if I'd go short FSLR right away, but buying ingots sounds good. According to your stats, they put $1.76 of tellurium into each 2x4 panel. It appears that works out to 3 cents per watt, and they are charging $2.48 per watt (check my math but I think it remains relatively insignificant). It will eventually become a limiting factor, but FSLR's margins are pretty good right now, so think its more likely they can outbid anyone else out there.

      Supposing they can outbid others to say $1k a pound (appropriate for the rarest element on earth I think), they might get 75% of the market (a stretch) and then max out a little over 1 GW. That is about $2.5 billion in revenue. I'd guess that would result in around $300-500mill profit. That means say 3-5 years from now, growth grinds to a halt, and, with no share price appreciation from today, they'd be at a P/E of 35-50, mighty steep for a Co. with no growth prospects.

      I'd be inclined to wait another quarter or two for them to continue their explosive growth, catch it at maybe $300, and then re-mortgage the house and short it to the hilt.

      Where can you buy Te ingots?
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