Why LDK Solar's Shares Dropped

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 Chinese solar manufacturer LDK Solar (NASDAQOTH: LDKSY  ) dropped as much as 15.5% today after the company reported earnings.

So what: LDK reported revenue of $114.7 million in the second quarter and a net loss of $165.3 million, or $0.97 per share. Management also said it would miss a payment on $196 million of debt due tomorrow.  

Now what: If LDK Solar were a U.S. company, it would have already been bankrupt, but it's based in China and gets continuous bailouts from state-run banks and local governments. The company partially defaulted on debt in April as well, and the recent quarter shows that improvements seen by solar competitors aren't trickling down to LDK Solar. This is one of the worst stocks on the market, and it's worth running away from it as fast as you can.

Interested in more info on LDK Solar? Add it to your watchlist by clicking here


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