Shares of solar panel makers took a beating last week, as brokerages downgraded a few amid flare-ups in the trade war between the US and China for an industry already suffering through its worst-ever downturn that has pushed most companies into the red. But while the war of words continues between Washington and Beijing, an even more interesting and potentially devastating low-key war is going on with the solar companies’ shares, which could soon face the very really threat of de-listing from the New York and Nasdaq stock exchanges. JA Solar (Nasdaq: JASO) crossed a quiet but critical threshold on May 18, when its shares closed below the critical $1 mark for the first time, ending that day at 89 cents. Since then they have gone 6 consecutive trading days without rising back above the $1 mark, closing last Friday at 92 cents. Stock market followers will know that rules dictate that US listed companies must maintain their share prices above $1 as a rule to remain listed on the big boards, and that trading below that mark for more than 30 days is grounds for potential delisting. JA Solar, whose market capitalization now stands at $186 million, is the first major player to fall below the $1 mark, but others could soon follow. Suntech (NYSE: STP), which calls itself the market leader even though its market cap is smaller than several of its rivals, saw its shares tumble 8 percent to $1.78 on Friday, near an all-time low, after HSBC reduced its price target for the company. (English article) HSBC cut its Suntech price target to $1 from a previous $1.27, and 13 of the 18 analysts who have updated their ratings on the company since last week now recommend a “sell”. Others who are hovering dangerously close to the de-listing range include Renesola (NYSE: SOL), now trading at $1.33, and Yingli (NYSE: YGE), whose shares now trade at $2.62. It’s unclear what would happen to JA Solar or any of the others if their shares really did trade below $1 for 30 days, as they could technically do a reverse stock split to bring their shares back above the $1 mark. But perhaps more importantly, falling below the psychologically critical $1 mark may finally be the wake-up call that many of these companies need to tell them they should seriously consider merging with some of their rivals to consolidate the crowded sector, or risk being de-listed or worse.
Bottom line: Several of China’s struggling solar shares are in danger de-listing, which could finally push some to consider mergers with rivals to save themselves.
Related postings 相关文章:
◙ Solar Storm Heats Up in US, China 中美太阳能产品征税之争升温
◙ Solar Comments: Consolidation Chinese Style? 太阳能行业：中国式整合
◙ Passive Beijing Blasts New US Solar Tariffs 中国炮轰美高关税不实用 解决太阳能产品纷争需更主动
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