Thursday, April 14, 2011

First Solar (NASDAQ:FSLR) Not Sunny Says Chanos

Spin it as they may, media can't hide the fact that solar is a disaster, as evidenced by the shrinking and unsustainable subsidies offered by governments in Europe, and as Jim Chanos notes with First Solar Inc. (NASDAQ:FSLR), insiders abandoning the stock right and left.

"Seeing the pattern that shorts sellers love," Chanos said in an interview. "Enormous insider selling, chairman has gotten rid of most of his stock in the last years and a half and departures."

The fantasy of low-demand and high-cost, so-called "green energy" like solar is proving to be a disaster, and even with the recent news that General Electric (NYSE:GE) is investing hundreds of millions into the sector only proves the lack of wisdom by those in decision-making positions, not the viability of the industry.

As Chanos rightly notes, reliance on traditional sources of energy isn't going away, and in fact, sources like coal are growing in demand globally, not declining.

Solar needs to be stripped of every government subsidy and compete against existing energy sources to see if there is real demand for it.

First Solar was trading at $140.36, falling $4.37, or 3.02 percent, as of 2:17 PM EDT.

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