CSIQ's Reputation: A Weakened Currency?

(Canadian Solar story updated for Thursday market action and analysis)

NEW YORK (TheStreet) -- Street frustration with corporate management often takes the form of pithy titles given to negative research reports, and the solar industry was no exception on Wednesday.

This was the case with the Macquarie Securities view of Canadian Solar(CSIQ), as Canadian Solar shares fell 15% on Wednesday after pre-reporting weaker-than-expected gross margins for the first half of 2010.

Macquarie Securities' analyst Kelly Dougherty titled her Canadian Solar report, "Oops They Did it Again," a rare moment of convergence between solar stock earnings surprises and pop star Britney Spears.

The bleeding in Canadian Solar's share price was continuing in Thursday's trading session. Canadian Solar share losses were at 3% in the afternoon on Thursday, after the 15% share decline on Wednesday.

Thursday share decline brought Canadian Solar's trading price below $18 intraday -- the first time that CSIQ shares have dipped below the $18 mark since last November.

Canadian Solar had the biggest loss in the solar sector for the second consecutive day on Thursday, and it was bringing many stocks in the solar sector down alongside it.

What exactly did Canadian Solar do to merit the share price implosion, the mocking reference to Britney, as well as a downgrade from Macquarie to neutral, and a price target drop from $35 to $23?

For the second consecutive quarter, Canadian Solar surprised the market with a pre-earnings announcement that gross margins would disappoint.

Last quarter, it was a problem with Canadian Solar's ingot furnaces, which the solar company said would be the cause of a gross margin shortfall.

Late on Tuesday, Canadian Solar said that a foreign exchange loss of as high as $20 million would be an unexpected cause for a gross margin shortfall in the first quarter.

For Macquarie Securities, though, the real "oops" is that Canadian Solar exacted another hit on its own reputation, and Macquarie seems inclined to keep the company on a short leash.