The announcement could not have come at a more unfortunate moment (or..), but this is pretty interesting nevertheless. Too bad investing on fundamentals has gone out of fashion..
First, here is the PR:
China’s Suntech solar plans to triple US sales
Thursday October 2, 2:12 pm ET
By The Associated Press
- China’s Suntech solar plans to triple US sales in ’09 through buyouts and residential sales
- OUTLOOK: Chinese solar company Suntech Power plans to triple sales in the United States next year through large megawatt and commercial projects and an aggressive expansion in the residential market.
- TAX CREDITS: Roger Efird, president of Suntech’s U.S. unit, believes Congress will extend alternative energy tax credits by the end of the year.
- ANALYST TAKE: Collins Stewart analyst Daniel Ries rates Suntech as “Buy,” and said the U.S. solar market could eventually rival Europe’s, where government tax credits have created a booming industry.
The stock is at $30 flat, an hour or so before the market closes, tanking 17%, no less.. We think these shares offer compelling value at these prices, but this market is capable of anything, most of all grossly undervaluing valuable companies.
The problem is indeed those US tax credit. They are presently included in the bank bailout plan,but if they get through, expect a nice rebound (if the financial system doesn’t melt in the meantime..)
Here is the latest take on these tax credit
- “…Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself…” Mark Twain.
- The Senate repeated its September 23rd approval of the New Energy tax credits when it passed them again, 74-25, as part of the economic rescue package.
- Now the House gets the chance to prove Mark Twain wrong by NOT repeating itself when it once again takes up the rescue package, and the New Energy tax credit extensions in it, measures the House rejected separately within the last few days.
- Who would have thought it? Just 2 days ago the S.F. Chronicle went with a story reporting the financial meltdown would kill the New Energy tax credits. Instead, House politics almost killed the credits and then, suddenly, without warning, the Senate’s financial rescue package brought them back to life.
- NewEnergyNews’ forecast, 2 days ago, of a dire fate for solar stock prices likewise went askew when the “facts” changed. The Senate put New Energy’s vital tax credit extensions into the rescue bill, H.R. 1424, Emergency Economic Stabilization Act of 2008 (EESA), giving life support to the markets in general and virtually rejuvenating solar stocks.
- Why shouldn’t the New Energy tax credits be part of EESA? Nothing could be better for the U.S. economy than policy support to industries whose time has come. Recent studies suggest New Energy will lose nearly 120,000 jobs if the tax credits are not extended but add $20 billion in revenues to the U.S. economy if they are.
- Gregory Wetstone, senior director of government affairs, American Wind Energy Association (AWEA): “We’re constantly getting caught in these political crosscurrents, and it’s time to move beyond that…”
- Now the the Senate’s rescue package goes to the House. Will the House repeat their rejection? Some think so. Others think the House will rise to the occasion.
- Representative Steve King (R-Iowa): “I think that they probably put enough sweeteners in it that they will be able to get the votes…“
- If the Senate rescue package gets enough support in the House to pass, it will be due to 3 major areas of pro-active legislating by Senate leaders.
- 1st, EESA improves the original “bailout” by adding oversight on spending, eliminating golden parachutes for executives, setting up a return on the taxpayers’ investment, and helping homeowners who face foreclosure.
- 2nd, the new bill increases FDIC insurance on bank deposits from $100,000 to $250,000.
- 3rd, it includes a variety of tax benefits including the Alternative Minimum Tax protection and the New Energy tax credits extension.
- Harry Reid (D-Nev), Majority Leader, Senate: “These tax cuts will create hundreds of thousands of jobs here in America, spark investment in the economy by small businesses, and help chart our course away from imported oil and toward the home-grown fuels of tomorrow…Every part of this bill…is aimed directly at the heart of our financial crisis… As Senator Obama said yesterday, there will be plenty of time to assign blame. Now is our time to work – not as Democrats and Republicans – but as guardians of the public trust – to forge a better day ahead.”
- Many have given the Senate bill, if not endorsement, at least grudging tacit approval. Senator McCain (R-Ariz) , Senator Obama (D-Ill) and Senator Biden (D-Dela) all came in from the campaign trail to vote for it.
- Senator Judd Gregg (R-NH), Ranking Member, Banking Committee: “If we fail to act, we fail the nation…To do nothing would neither be logical or responsible…”
- As always, the House of Representatives is a different story altogether. Fiscally conservative Republicans and fiscally conservative Blue Dog Democrats have controlled proceedings so far on both the rescue package and the New Energy tax credits.
- Many, however, say momentum is shifting toward support in local districts across the country. More importantly, phone calls to Representatives’ offices, earlier in the week reported to be overwhelmingly against the package, are now, it is said, evening out.
- Representative John Yarmuth (D-KY), a “no” vote on the 1st House rescue bill: “Before the vote on Monday, I think our count was 965 to 60…On Tuesday, after the market dropped…the calls started out in the morning saying, ‘why don’t you do something.’ Once the market came back, they started evening out again. Now they are running about 50-50…This morning when the market was off a couple of hundred points, they said the calls were coming in saying do something, and when the market was up they stopped…So people are following the market pretty closely.”
- Yes, the market crash changed some House attitudes. The more liberal House members like the Senate package add-ons. And some conservatives see the wisdom of overlooking everyday rules pertaining to funding when the moment requires a $700 billion rescue.
- Representative John Boehner (R-Ohio), Minority Leader, House: “[It has a] much better chance…[but I’m] not taking anything for granted.”
- It will only take a dozen members to change the votes they cast in Monday’s 228-to-205 rejection.
- All members of the House are, of course, up for re-election. Their dilemma: Recent polls show 2/3 of the country is angry about the rescue plan but a growing minority (38-to-45%) believes it is “the right thing to do.”
- House Republicans are being pushed toward approval by the White House and by Senator McCain.
- There are rumors Senator Obama is urging those House Democrats who will listen to him to back the Senate plan.
- Here’s how Senate Majority Leader Reid described the Senate vote: “When called upon to choose between what is easy and what is right, we rejected what is easy and chose what is right…”
- Neither Senator Reid nor Senator Obama, however, has much leverage with the most fiscally conservative of their party, the Blue Dog Coalition. The Blue Dogs do not trust party leaders or the Bush administration. And they hold the deciding votes.
- Representative Lloyd Doggett (D-Texas): “The Senate measure has changed my position from ‘No’ to ‘Heck no’…With the Senate amendment, the bailout has gone from bad to worse, $105 billion more in public debt worse.”
- “It’s gonna come down to Blue Dogs,” a Republican House staffer told NewEnergyNews.
- And it will come down to a floor vote, no sooner than and probably on Friday.
- Perhaps some Representatives will rise to the moment and prove Mark Twain wrong. Mark Twain was rarely wrong but the current situation is a rare moment.