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Nov 18, 2016

S3 BLACKLIGHT: Short Interest Soaring on First Solar

First Solar (FSLR US) announced after close on 11/16 that it intends to lay off more than one-quarter of its staff and restructure operations, which will lead to at least $500 million in charges, pushing the company into a loss for 2016.   The stock price has lost a little over half its value this year, after trading as high as $75/share back in March.

Our S3 real-time short interest projection is displaying exposure today to be at a year-to-date high of $627 million and trending higher.  This would result in as much as 26% of freely floated shares being lent to short sellers at the moment, compared to 19% at the end of October, a 37% increase.  

Demand for borrow has spiked dramatically immediately post-election, with spot levels moving off general collateral/cheapest rates to around 100 basis points currently.  The recent surge in demand could be due to the fact that Trump has openly been in favor of assisting the domestic oil, gas and coal sectors over renewable energy.   The uncertainty regarding future government solar subsidies, potential tax incentives and global trade policies do not bode well for the sector in general.  Finally, taking into consideration the fact that overall solar demand from China has been slowing down, the future of First Solar is not looking so bright.

For more information on the above analysis, please contact:
Matthew Unterman, Director, S3 Partners, LLC    

The information herein (some of which has been obtained from third party sources without verification) is believed by S3 Partners, LLC ('S3 Partners') to be reliable and accurate. Neither S3 Partners nor any of its affiliates makes any representation as to the accuracy or completeness of the information herein or accepts liability arising from its use. Prior to making any decisions based on the information herein, you should determine, without reliance upon S3 Partners, the economic risks and merits, as well as the legal, tax, accounting and investment consequences, of such decision.

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