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First Solar (FSLR) – A Game Of Liar’s Poker

|Includes: First Solar, Inc. (FSLR)

Are the numbers being reported today by First Solar (NASDAQ:FSLR) even believable or relevant anymore? Considering First Solar's independent auditor, Pricewaterhousecoopers (NYSE:PWC), did such a stellar job reviewing the books for MF Global and Solyndra why should anybody be concerned.

Let's take a look at some other numbers that really mean something………..

According to the Solar Energy Industries Association® (SEIA) the confirmed outlook for thin-film looks like a massacre. The harsh reality is this; thin-film solar installations in the 'Under Development' category are down a staggering ↓81% as compared to thin-film in the 'Operating' and 'Under Construction' categories. The numbers and breakdown are as follows per the SEIA website.
http://www.seia.org/galleries/pdf/Major_Solar_Projects.pdf

Utility-Scale Installations (excluding CSP) as of Jan 17, 2012

 

Operating Projects (MW)

Projects Under Construction (MW)

Projects Under Development (MW)

Total PV (incl thin-film)

809

3272

20660

Total thin-film

230

1100

1273

% of thin-film

28.43%

33.62%

6.16%

By adding the totals in the 'Operating' and 'Under Construction' categories, the percentage of thin-film within the overall Total PV is (1330 MW thin-film / 4081 MW Total PV) which yields 32.6%. To sustain this 32.6% of the U.S. market, this would mean that the total MW in the 'Under Development' category would need to be around 6,733 MW, however in reality it's only at 1,273 MW. Therefore, the actual numbers (not a forecast) clearly illustrate an 81% drop in thin-film if it was able to keep pace with its peers.

Over the last 12-months, the ratio of shares Purchased / Sold by FSLR insiders is 3,000 / 3,528,722 respectively (includes both planned and unplanned). This simplifies to a ratio of 1 share bought for every 1,176 shares sold by the insiders. Keep this solar-share-dumping figure in mind when management's lips move in tonight's earnings call. The biggest seller of them all has been First Solar's founder and current CEO, Michael Ahearn. http://data.cnbc.com/quotes/FSLR/tab/8.2

Who knows, maybe someday I'll be able to turn on the TV and watch some reality storage locker bidding show. And maybe the Wow-Factor will score a locker full of First Solar panels. And maybe they'll have some collector value like an old classic tube amplifier or the first beta-max player. Until that day, I'll do what the insiders are doing and short this company until it hits the pink sheets.

Disclosure: I am short FSLR.