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Why Shares of ReneSola Ltd. Dropped Today

By Travis Hoium - Mar 26, 2014 at 12:00AM

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Is this meaningful or just another movement?

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 solar product manufacturer ReneSola ( SOL -13.70% ) fell 14% today after the company announced it was stopping select shipments to the U.S.

So what: ReneSola said today it had been chosen as a respondent to the Department of Commerce's anti-dumping investigation on photovoltaic products from China. Management said it is cooperating but also halting shipments to the U.S. of products that are within the scope of the probe.  

Now what: ReneSola has module manufacturing facilities around the world which may help it get around tariffs. But they also could have a huge impact on the company, as 31% of module demand in the third quarter of 2013 and 27% in the fourth quarter came from the U.S. The loss of revenue from the U.S. alone will hurt the company, while tariffs on top of what Chinese manufacturers already face could have a major long-term impact.  

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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ReneSola Ltd
$5.23 (-13.70%) $0.83

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