First Solar, Inc. (NASDAQ:FSLR) is feeling the burn after delivering a release saying the solar company wants to exit its yieldco venture with SunPower Corporation (NASDAQ:SPWR). The announcement, made Wednesday, has sparked losses in all involved parties, including a 3%-plus decline in FSLR stock.
SPWR was also down more than 1% as the market reacts to First Solar’s statement that it’s looking to sell its interests in 8Point3 Energy Partners LP (NASDAQ:CAFD) — itself off more than 6% in early Thursday trading. SunPower, in a response, said it too was looking for “strategic options” in the joint venture.
Oppenheimer quickly downgraded 8point3 to “Perform” from “Outperform,” stating:
“We believe SPWR may be able to find a partner that is more closely aligned with the goals of CAFD and brings additional strategic resources to support growth. But, given the uncertainty around the strategic trajectory of the platform and the board’s willingness to let the parent companies explore alternatives for project asset sales away from CAFD and uncertainty around growth after FY17, we step to the sidelines.”
First Solar, for its part, wants out of the yieldco — a separate publicly traded company that generates cash by tethering clean-energy projects to utilities — to focus on the company’s next big product, the Series 6 panel.
The company gave up on releasing a Series 5 design amid heavy losses and a major restructuring plan, in part to focus on the Series 6, which it hopes to release in mid-2018. By exiting the yieldco, it would have more capital to dedicate toward producing the Series 6, as well as keeping itself afloat.
The move in FSLR stock was a quick reversal from the brief optimism earlier this week over murmurs that Washington was considering a carbon tax — news that lifted the entire solar sector. However, it’s a continuation of the stock’s downtrend since early 2016 that has seen shares crumble by roughly 65%.
Shares are now plumbing lows not seen since 2013, though this is a distinctly different matter. The $25-$26 area was a low point in 2013 during what was an 85% up-year for FSLR.
As of this writing, Robert Martin did not hold a position in any of the aforementioned securities.