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The first company to receive a federal loan guarantee under a stimulus program for green energy projects, Solyndra, just declared bankruptcy -- the guarantee was for $535 million, according to Reuters. When filing for Chapter 11, Solyndra said they could not compete with overseas rivals selling cheaper products.
Because of the circumstances surrounding Solyndra's financing, the bankruptcy is hitting the Obama Administration hard. Both Reuters and The Associated Press are reporting that leaked emails indicate the White House was worried in January about the possibility of a Solyndra default and its implications for re-election.
"While the company may avoid default with a restructuring, there is also a good chance it will not," the Jan. 31, 2011 email between senior staffers said. "If Solyndra defaults down the road, the optics will arguably be worse later than they would be today." (via Reuters)
Solyndra's loan was restructured by the government earlier this year, but the company later approached the Department of Energy about a second restructuring of the loan. On August 30, officials replied that the second restructuring was not possible, and Solyndra filed for bankruptcy the following day.
For general investors, the bigger questions here are why Solyndra failed, and if it has negative implications for the rest of the U.S. solar industry. To help you in your quest, we ran a screen on solar power stocks for those that have seen the biggest increases in shares shorted month over month.
Short-sellers have become pessimistic on these names -- what do you think? (Click here to access free, interactive tools to analyze these ideas.)
1. Trina Solar (NYSE: TSL ) : Designs, develops, manufactures, and sells photovoltaic (PV) modules worldwide. Shares shorted have increased from 14.93M to 16.59M over the last month, an increase which represents about 2.84% of the company's float of 58.36M shares.
2. LDK Solar (NYSE: LDK ) : Engages in the design, development, manufacture, and marketing of photovoltaic (PV) products; and development of power plant projects. Shares shorted have increased from 33.62M to 37.28M over the last month, an increase which represents about 6.59% of the company's float of 55.54M shares.
3. MEMC Electronic Materials (NYSE: WFR ) : Engages in the development, manufacture, and sale of silicon wafers for the semiconductor industry worldwide. Shares shorted have increased from 22.71M to 26.28M over the last month, an increase which represents about 1.56% of the company's float of 229.51M shares.
4. Yingli Green Energy Holding (NYSE: YGE ) : Engages in the design, development, manufacture, marketing, sale, and installation of photovoltaic (PV) products in the People's Republic of China and internationally. Shares shorted have increased from 14.57M to 16.34M over the last month, an increase which represents about 1.97% of the company's float of 89.94M shares.
5. Canadian Solar (Nasdaq: CSIQ ) : Engages in the design, development, manufacture, and sale of solar power products in Canada and internationally. Shares shorted have increased from 4.93M to 5.76M over the last month, an increase which represents about 2.78% of the company's float of 29.81M shares.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Alexander Crawford does not own any of the shares mentioned above. Data sourced from Yahoo! Finance.