American Superconductor Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of wind turbine specialist American Superconductor (Nasdaq: AMSC  ) were facing some turbulent currents today as they slid as much as 13% in intraday trading before recovering substantially.

So what: What a mess. Currently trading at $8 and change, American Superconductor's stock is already well off of the high-$30s price tag that it held late last year. The company is locked in a dispute with China's Sinovel, which was American Superconductor's largest customer and has provided the majority of its sales for years. But in a filing yesterday, the company said that it will be restating its financials for September and December of last year as it apparently struggles to collect from other Chinese companies. September's sales will be lowered from $102 million to $98 million, and December will plummet from $114 million to $43 million. The company also said it expects to report full fiscal year revenue of $307 million -- well below the $360 million that analysts were looking for.

Now what: While the stock has already taken quite a pummeling since the beginning of the year, I'm a little surprised that it's fared as well as it has today. As I write, the stock continues to recover, suggesting that investors may not be all that concerned with this latest revelation. According to Forbes, though, the same can't be said for Jefferies analyst Jesse Pichel, who cut his price target on the stock to $6 and called it "uninvestable."

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Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.


Read/Post Comments (3) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 13, 2011, at 10:42 AM, GoNuke wrote:

    A painful lesson with respect to doing business in China.

  • Report this Comment On July 13, 2011, at 1:17 PM, picador3 wrote:

    Jesse's $6 target is too high. I think this company, with untold legal liabilities stemming from its equity sale late last year, is gone. I would not be surprised if one or more of the parties that have commenced legal action have also asked a judge to stay the company's plan to spend $30 million to postpone the Switch merger- a deal that is not going to happen. The Chinese relationship has ended, period.

    Liquidation is the only way out.

  • Report this Comment On July 15, 2011, at 11:11 PM, Netteligent09 wrote:

    Never invest in company with management and Board of Directors from AMSC. We call them "crooks" for enteprise criminals.

    SEC and lawyers are moving in very soon. There are more crisis.

    Now AMSC wants to merge with Swiss company to cover up.

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