Why SolarCity, Ballard Power Systems, and Sears Holdings Tumbled Today

On a terrible day for the stock market at large, these three stocks posted even worse losses. Find out the details here.

Apr 7, 2014 at 8:30PM

The sell-off on Wall Street continued Monday, as investors continued to flee from high-flying stocks in search of safer investments. Without any major economic data releases today, investors were left looking forward to an earnings season that some expect to be particularly ugly given the harsh winter conditions. Yet some of the worst losses of the session were reserved for SolarCity (NASDAQ:SCTY), Ballard Power Systems (NASDAQ:BLDP), and Sears Holdings (NASDAQ:SHLD).


Source: SolarCity.

SolarCity dropped 8% as more investor lawsuits piled onto the solar company, this time from an entity called the Shareholders Foundation. Yet the more likely cause of SolarCity's decline is simply that investors aren't convinced that the solar innovator can live up to the promise that its current valuation implies. Still, bulls can point to the fact that SolarCity has created a way to finance its operations through the sale of solar bonds, with SolarCity having announced its second sale of about $70 million in bonds last week. Barring a full-scale recession, the residential solar industry in the U.S. continues to look bright, and when you also consider the possibility of SolarCity battery technology finding applications in other industries, shares look like a potential bargain if the pullback continues.

Ballard Power Systems fell 9% in the aftermath of Plug Power's (NASDAQ:PLUG) purchase last week of a third-party maker of fuel-cell stack technology. The deal calls into question whether Ballard Power Systems can continue to rely on its partner as a growing customer, and with Plug getting so much attention from investors for recent contracts and others it says it should get in the near future, it's easy to understand why Ballard Power Systems stock is taking a hit in the general flight from high-flying, high-risk stocks. Yet to its credit, Ballard Power Systems has a well-diversified client base, with Plug making up just over 10% of Ballard's overall revenue. While Ballard might be vulnerable elsewhere, Plug's success or failure won't make or break the company.

Finally, the price of Sears Holdings stock plunged by 24%, but the bulk of the drop came because of the retailer's spinoff of Lands' End, which began trading independently today after Sears completed the transaction Friday night. For its part, the spinoff didn't perform all that well either, with the stock closing nearly $1 per share below where it opened the day. For Sears Holdings investors, though, the move simply represents the latest corporate-restructuring move that CEO Eddie Lampert has used to try to unlock value from the ailing retailer. In the end, many investors are skeptical whether there'll be anything left of Sears Holdings at the end of the day. But even if the stock eventually goes to zero, it looks likely that Sears Holdings will leave a trail of successor companies in its wake.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends SolarCity. The Motley Fool owns shares of SolarCity. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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