Solar is so over.
The news broke early this morning, and on the other side of the ocean: Germany's No. 3 solar panel maker is bidding to enter the lucrative business of ... car manufacturing. Now, you're going to think I'm making this up, but I assure you that what follows is a true speculative deal Bloomberg reported on (with thanks to CAPS newcomer and solar skeptic Hapoalim Securities for bringing it to my attention):
What's German for chutzpah?
Solarworld AG bid 1 billion euros to buy General Motors'
Solar power, green cars -- a match made in heaven?
Sure, on the surface, Solarworld's offer makes sense. Solarworld does solar power -- green energy. It wants to buy Opel to build hybrid and electric (i.e. green) cars. Plus, SW wants all of Opel's property, plant, equipment, and trained workers, for free. Hard to go wrong with terms like these. Worse comes to worst, SW could just turn around and sell Opel for a profit.
Dig a little deeper
And yet, the tenuous logic of the deal aside, the idea as a whole sounds utterly crazy. I mean, solar power is the next big thing, right? Isn't that why Suntech
The answer isn't obvious, but if you think on it a bit, I suspect it will come to you: Solar power ain't what it used to be. Previously considered an industry at the front end of a capital J-curve, we're now beginning to remember that j's can be downgraded into the lower case as well.
And now, Solarworld thinks it can get better returns on its capital by building green Buicks than by manufacturing solar panels. Whether Solarworld is right or wrong about that, it doesn't sound like good news for solar pure-plays like Solarfun
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