Suntech Shares May Be Worthless; Canadian Solar Sells More

The latest news from Canadian Solar (Nasdaq: CSIQ) and Suntech (NYSE: STP) is casting a shadow over a nascent recovery for the embattled solar sector, as each company struggles to fix its broken finances pummeled by a two-year downturn. Canadian Solar has announced a plan to raise up to $50 million through a stock sale, while domestic media are reporting that bidding for bankrupt Suntech is moving ahead quickly, indicating the end may be near as an independent company for this former solar high-flyer. All this shows that investors shouldn’t get too bullish on solar companies just yet, even as Canadian Solar says it is still on target to post a profit for all of 2013.

Let’s start off with Suntech, which is in the process of a painful reorganization in bankruptcy court. The steady stream of signals coming from the courtroom in the city of Wuxi seem to indicate that Suntech won’t emerge as an independent company after the reorganization, though its brand and operations are likely to survive. That means Suntech shareholders could ultimately find themselves holding worthless stock, which is often the case for companies that undergo this kind of bankruptcy reorganization.

The latest report indicates that rival solar panel maker Yingli (NYSE: YGE) has looked at Suntech’s books and decided to bid for the company’s main manufacturing assets. (Chinese article) According to the report, Yingli is seen as the most likely winner in the current round of bidding, where it is competing with 3 other firms including Trina Solar (NYSE: TSL). Previous reports had indicated that the companies would each bid to become a strategic investor in Suntech’s main assets, which would probably see them take a controlling stake in those assets.

Written by Doug Young. To read the full article, click here.

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Solar Energy: The Wave of the Future?

Solar energy has been touted as a viable energy source for the future. The need and demand for clean renewable energy has been increasing in recent years. But a New York Times story reports how increasing demand does not mean rising stock prices for solar energy companies.

This is partly the result of industrial policies of foreign nations like China that subsidize solar energy. In short, these subsidies have pushed the price of solar energy panels down worldwide. So the tumble in these prices can squeeze profit margins and push down share prices of solar companies like Solar City (NASDAQ: SCTY), SunPower (NASDAQ: SPWR) and SunEdison (NYSE: SUNE)

Written by Kyle Colona. To read the full article, click here.