Shares of LDK Solar (NYSE:LDK) closed up 20 percent to land over a dollar for the first time since the beginning of October. The surge follows news that China’s Ministry of Finance will be accepting new applications from regional governments seeking solar subsidies. New projects would come as a welcome reprieve for LDK, which hit a new 52-week low in October.
The stock price has come down over 75 percent this year to date. A glut of overcapacity in the global solar market, compounded by weak economies, spelled disaster for much of the solar industry. Trying to stabilize prices, the U.S. International Trade Commission voted on November 7 to issue anti-dumping and countervailing tariffs on imports of solar panels from China.
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SunTech Power Holdings (NYSE:STP), an outspoken critic of the tariffs, closed up 4.4 percent on the news. The company has also been trading below a dollar, and has been warned that if it does not stabilize its share price it could lose its position on the exchange. Yingli Green Energy (NYSE:YGE), a Chinese manufacturer, closed up 3.7 percent.
American manufacturer First Solar (NASDAQ:FSLR) closed up 3.5 percent, with short interest approaching 50 percent of float. The stock has come up 57 percent in the six months, while dropping over 28 percent this year to date. Analysts have a mean target of $22.75, almost three dollars below Monday’s closing price of $25.43.
Tariffs should help First Solar solidify its position, but the industry still looks unstable. The stock price is clearly volatile. Coming into the election there was a lot of speculation building about the future of solar — i.e. short interest — but policy won’t decide the fate of the industry. The market will, and right now the Chinese market in particular is expected to see consolidation before a long-term rebound.
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