NEW YORK, July 25 (Reuters) – Shares of GT Solar International Inc SOLR, an equipment provider to solar energy companies that went public on Thursday, fell as much as 22 percent on Friday on news that one of its major clients had signed a contract with a Chinese competitor.
LDK Solar Co (LDK), which represented 62 percent of GT Solar’s revenue in the fiscal year 2008, said in a statement Friday it had signed a contract with China-based JYT Corp, one of GT Solar’s competitors.
That news put pressure on GT Solar’s prices, said Sal Morreale, who tracks IPOs for Cantor Fitzgerald.
Since debuting on Thursday, GT Solar’s stock has been falling sharply. The company’s shares, which had priced at $16.50, in the middle of the estimate range, fell 11.6 percent in their first day of trading. By midday Friday they were off another 14 percent, at $12.50.
Analysts had ascribed Thursday’s fall to the lower-than-expected earnings reported a day earlier by MEMC Electronic (WFR), a major supplier of silicon wafers to the chip and solar industry, dragging down most solar stocks.
But in Friday morning trading, as MEMC Electronic was up 5 percent, and other solar stocks generally flat, GT Solar shares continued their fall.
A larger problem might lay with the starting price, one analyst said.
“The IPO was overpriced,” said Ted Sullivan, a senior analyst with Lux Research, adding that the pricing gave GT Solar a market capitalization of about $2.5 billion, much higher than that of German competitor Centrotherm Photovoltaics, with a market capitalization of about $1.2 billion.
GT Solar down sharply as major client defects
Fri Jul 25, 2008 12:20pm EDT
NEW YORK, July 25 (Reuters) – Shares of GT Solar International Inc SOLR, an equipment provider to solar energy companies that went public on Thursday, fell as much as 22 percent on Friday on news that one of its major clients had signed a contract with a Chinese competitor.
LDK Solar Co (LDK), which represented 62 percent of GT Solar’s revenue in the fiscal year 2008, said in a statement Friday it had signed a contract with China-based JYT Corp, one of GT Solar’s competitors.
That news put pressure on GT Solar’s prices, said Sal Morreale, who tracks IPOs for Cantor Fitzgerald.
Since debuting on Thursday, GT Solar’s stock has been falling sharply. The company’s shares, which had priced at $16.50, in the middle of the estimate range, fell 11.6 percent in their first day of trading. By midday Friday they were off another 14 percent, at $12.50.
Analysts had ascribed Thursday’s fall to the lower-than-expected earnings reported a day earlier by MEMC Electronic (WFR), a major supplier of silicon wafers to the chip and solar industry, dragging down most solar stocks.
But in Friday morning trading, as MEMC Electronic was up 5 percent, and other solar stocks generally flat, GT Solar shares continued their fall.
A larger problem might lay with the starting price, one analyst said.
“The IPO was overpriced,” said Ted Sullivan, a senior analyst with Lux Research, adding that the pricing gave GT Solar a market capitalization of about $2.5 billion, much higher than that of German competitor Centrotherm Photovoltaics, with a market capitalization of about $1.2 billion.