‘Paranormal Activity’ At Canadian Solar
Canadian Solar has postponed the release of its first quarter results in the wake of a Securities and Exchange Commission (SEC) subpoena. Not surprisingly, the company has been working hard to dispel concerns — “market demand was very strong in the first quarter,” Canadian Solar CEO Shawn Qu highlighted in the release announcing the subpoena — but analysts aren’t buying the IR spin.
First off, why the investigation? Of concerns are PV panels sold by Canadian Solar during Q4 but which some customers returned in the first quarter. Investors and analysts, are concerned about what these customer returns say about the overall quality of Canadian Solar panels.
“Our key concern is: what instigated the returns? In a tight demand environment, this rates as paranormal activity,” said Oppenheimer analyst Gary Hsueh. Reuters reports that Hsueh cut his price target on the company’s stock from $19 to $10. On Wednesday Canadian Solar shares closed at $10.17.
The real concern is that Canadian Solar sales are slumping while overall global demand for solar PVs is growing. The company said its first quarter PV shipments fell and it expects second quarter shipments to remain weak, which is more evidence, according to Oppenheimer’s Hsueh, “of paranormal activity at Canadian Solar.”
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