When a press release combines Buffet and Billions, the stock attached to that release, is sure to see some upside action. First Solar released news this morning that it was selling its much hyped $2 billion topaz farm project to MidAmerican Energy Holdings Co. This stock has been taken to the woodshed this year, and soared 10%+ to 51.86 in morning trade on the news.
Now folks who read our blog and spend time in our chatroom, know our feelings on FSLR. We have written about FSLR the past few months, and have played her like a textbook. Which means buying puts into a Gap... Which is what we did today.
FSLR still remains a troubled company, and the asset sale confirms that. Folks buying into the hype, were taught a lesson, as the stock closed at $47.99.
We went short via the $47 and $48 PUTS after the open on Wednesday, and our options were up 300%+ on the day. We fully expect FSLR to touch the $45 level before the weeks out.
Below is the news from Marketwatch:
By Melodie Warner
First Solar Inc. FSLR +4.08% agreed to sell a solar power plant being built in California to MidAmerican Energy Holdings Co. as part of the solar-panel maker's plans to reduce spending.
The $2 billion Topaz Solar Farm project -- a 550-megawatt photovoltaic power plant being built in San Luis Obispo County, Calif. -- will have the capacity to generate enough renewable energy to power about 160,000 average homes. Pacific Gas & Electric Co. will purchase the electricity under a 25-year power purchase agreement.
First Solar has agreed to construct, operate and maintain the Topaz project for MidAmerican, an energy services provider. Construction is expected to be complete by early 2015.
First Solar said in October it intended to reduce spending next year and was looking at opportunities to reallocate overhead expenses to fund increased investments in research and development, among other things.
The company reported its third-quarter profit climbed 11% but badly missed expectations despite a 26% jump in sales.
Shares were trading 3.6% higher at $47.75 premarket. The stock has fallen 65% so far this year through Tuesday's close.