Shares of First Solar cooled Wednesday after the solar panel maker said it planned to sell 8.5 million shares in a secondary stock offering.
Secondary offerings are always good news-bad news situations.
First the good news. First Solar's stock has rallied nearly 70% this year, ahead of the offering. Demand for solar panels has been growing. The company swung to a profit in the first quarter.
That creates prime conditions for the company to raise capital through a secondary offering -- a healthy and prudent move.
Now the bad news. Well, it's not really bad news per se. You'll often see a company's stock fall after a secondary offering because it increases the number of shares outstanding and cuts back, or dilutes, the ownership stakes for existing investors.
Investors are a fickle bunch. While it's probably a good thing in the long run, no one likes to see their ownership watered down.
All of this offered plenty of fodder for StockTwits traders to chew on.
Eight is great! But there are more analysts than underwriters for First Solar.
Maxim Group kept its sell rating on the stock and a $42 price target. They say the offering doesn't "meaningfully alter" their view of First Solar.
Ha. Short interest is actually down about 15% in June. But looking at the ebbs and flows of bets on a stock decline, we'll probably see some shorts coming out of the woods soonish.
Maxim analysts were cautious about the stock offering. They say it will be "dilutive" to earnings, so that may attract some of those downside bettors.
That premarket move definitely wasn't looking pretty but the stock seems to be making a comeback. While it fell nearly 6% once trading opened, shares are now down only 2%.
You know what they say: Hindsight is always 20-20.
Maxim thinks the company needs to be booking more business. The capital inflow will help First Solar bring some undeveloped projects to fruition but it remains to be seen whether that will be enough to offset the dilutive impact on its earnings.
Talk about a warm-up.
Investors can't seem to get enough of companies that harness the sun's power. Shares of SolarCity (SCTY) soared to an all-time high of $31.89 on Monday.
The company has only been public for five months and shares have nearly quadrupled from their $8 IPO price back in December.
Related: SolarCity CEO talks the future of solar power
SolarCity, which installs solar panels, is still among the smaller players MORECatherine Tymkiw - May 13, 2013 11:24 AM ET
Solar stocks are back in vogue.
Shares of First Solar (FSLR) soared nearly 11% to a new 52-week high early Wednesday, and other solar stock were quick to follow. Shares of SunPower (SPWR), LDK Solar (LDK), SolarCity (SCTY) and Canadian Solar (CSIQ) were all shining pretty brightly.
Solar companies have struggled in recent years in the face of rising competition from cheaper solar panels manufactured in China.
The future looked so dim MORECatherine Tymkiw - Apr 24, 2013 12:48 PM ET
First Solar shares spiked more than 50% Tuesday, rising to a new 52-week high and triggering several circuit breaker on the way up after the company issued a bullish forecast for the year.
The solar panel maker said it expects to earn between $4 and $4.50 per share, with annual sales between $3.8 billion and $4 billion. The guidance was well above analysts forecasts. Those polled by Thomson Reuters have been MOREHibah Yousuf - Apr 9, 2013 3:31 PM ET
Shares of First Solar plunged 17% Wednesday to their lowest level in three months after the company delivered disappointing fourth-quarter sales figures and a weak outlook for the first quarter.
First Solar (FSLR) reported revenue of $1.1 billion for the last three months of 2012, falling short of the $1.3 billion that analysts were expecting. For the first quarter, the solar panel maker expects to earn between 70 cents and 90 MOREHibah Yousuf - Feb 27, 2013 1:38 PM ET
First Solar (FSLR) made JPMorgan's short list of stocks to avoid in 2013.
In fact, the solar panel maker was the only stock to make the list. That's an unusual move for JPMorgan (JPM), whose equity stock analysts typically pick several stocks to avoid as part of their year-end roundup.
First Solar earned this dubious distinction for the second year in a row, but to be fair, JPMorgan's analysts weren't exactly MOREMaureen Farrell - Dec 14, 2012 3:19 PM ET
It's been a good week for heavily shorted stocks reporting earnings. I wrote (and did a video) Thursday about how Green Mountain Coffee Roasters (GMCR) surged despite poor guidance.
First Solar (FSLR) was another company that popped on earnings news even though there are still many economic headwinds in the U.S. and Europe facing the maker of solar panels. That made it Thursday's Stupid Stock Move of the Day.
#StupidStock Move of MOREPaul R. La Monica - Aug 3, 2012 12:18 PM ET
Not a member yet?Sign up now for a free account