First Solar: Significant Downside Potential

A NY-base presenter recommends a short on First Solar (NASDAQ: FSLR, $157.69). He argues that the company is no longer the low cost producer in the fiercely competitive solar space. Gains in the efficiency of its modules have been decelerating and FSLR's cost advantage may no longer be there. With supply likely to substantially exceed demand this year, First Solar may be the only manufacturer left unable to price its product competitively. Cuts in government subsidies for solar across Europe, and particularly in the two largest markets Germany and Italy, are another major threat to the company's profitability.