Piggybank

The Tellurium Supernova Has Erupted

Wel as i said im very bullish on VNP and hold a conciderable position in it. And i would like the extra exposure but it doesn't have to be to open, it's a wonderfull play and i'm pretty sure ill make a load on it.

Umicore doesn't have the tech that VNP has iirc, not by far. And it's less of a "pure play" in this regard, and VNP is expanding side by side with FSLR.

The Tellurium Supernova Has Erupted

Well i rather thought that there were copper mines who just didn't extract the tellerium that they otherwise could because they didn't find it interresting enough. But i'm not skilled enough to talk geoligy neither.

talked it over with others though, and there was one big argument i didn't mention yet, and this argument made a lot of sense with the "collegue's". namely that one of scale:

Fslr revenue's: roughly 200 million $
Fslr profit: roughly 62 million $

VNP revenue: roughly 8 million $
VNP profit: roughly 2 million $

It's like to say with te words of one collegue i would call "the ultimate hedgehog" that it's like comparing the Titanic with a tugboat, although in that fact titanic was a bit badly chosen allusion and we changed it to oil tanker and then we had a discussion as to what an iceberg could do to an oiltanker ... Anyway, it's kinda a drop in the bucket if you consider that from the 8 million $ VNP earns about 6 million $ comes from FSLR, and that aint all that much on a total cost of revenue of about 93 million $ for FSLR. And this is for the most recent quarter when Te had already risen as you noted. Consider that for sell/general/admin expenses FSLR had 3 million $ costs less than last quarter while having rising revenue, enough in that aspect alone to offset these rising Te prices.

consider then that still their raw material inventory's of both company's are rising. you might argue they are hoarding but then the Te price is a bit overprized now and and the hoarding has very few effect on their EBITDA.

this should IMO ultimatly schatter youre argument that "if tellurium price triple or quadruple from current price, it will be enough to kill FSLR as a business." Te seemingly already tripled and it didn't hurt FSLR by a bit, the difference is scale is just to big. For the tripling of Te's price VNP didn't realy ask much of a premium for it's CDTE. Sure it ask what, 1 million $ more from FSLR at the moment? There is still 60 million $ profit for FSLR to go trough. And this rough 1 million $ more paid to FSLR also includes most probably a larger volume of CDTE sold, afterall from the company's balance sheet one can see that their production assets have rizen in the last quarter, by a fair bit to.

The difference of scale is just to big. Atleast more than big enough to push this "issue" much further down the agenda in the future, it's hardly an issue now, you have been posting on this since januari and last FSLR's figure's didn't show anything of a problem in this regard. I doubt shorting FSLR for ths issue alone is a wise choice. Atleast not now.

The Tellurium Supernova Has Erupted

Well i hold a quite fair psition in 5N plus since januari, and i like the company a lot, it has much going for it in these circustances and it is doing really well. As you mentioned, 5N plus is about the only one doing what it does, a monopoly position wich it will be able to profit from a long time, prices for materials that they can set themselfs, and rapidly increasing production. it is also in some other very inovative markets with superior technoligy, and they will start to produce high quality CIGS soon to.

Then again chinama... errr Mark. Several thing's still raise questions with me concerning this. First of all tellirium isn't exactly scarce on the earth, it is just not extracted much yet by the copper producers, but one could think that at certain prices it would become interresting, and that this price might not have to rise that much for it, as well there are clearly already company's extracting it. Maybe FSLR's comments point to the fact tat if needed, more tellirium can be extracted.

Another thing that also deffinatly raises questions with me is the amount of raw material inventory both company's have. Both 5n plus and FSLR have constant rising raw material inventory's. Not only in the last quarter, but also in the quarter before when FSLR's revenue's doubled.

wel many other questions pop up with me. How much cdte does FSLR use per panel and can it change the needed amount in the future, or ramp up the effeciancy of their panel for the same amount of CDTE used? Can FSLR make CDTE for themselfs if needed? Can VNP make CdTE with less TE? Is an increase in TE production in development? Can FSLR outweight rising CdTe prices with technoligy effeciancy?

In my oppinion, this is deffinatly speculation, its just very hard to tell how much FSLR can be affected by this. Don't get me wrong, it's quite interresting speculation that should lead to a nice discussion. I can definatly vouch for you on this board that you are a smart and capable analyst, and youre predictions on PAL, SWC and TE prices back in januari were bang on the money. And this is comming from a person that is not nessecarily in agreement with you on this specific issue, or atleast on how far reaching it is.