NEW YORK (TheStreet) -- Shares of U.S. solar company First Solar (FSLR) slid by as much as 7% on Wednesday as the political fallout from the bankruptcy of White House-backed solar company Solyndra produced more negative headlines.
The collateral damage to the solar sector pushed First Solar shares down at one point on Wednesday morning by more than $5 a share to below $74, after already dropping yesterday to a share price it hadn't seen since 2007. The company has three loans totaling $4.5 billion pending approval as part of the same program that provided funding to Solyndra.
The widening Congressional inquiry of Solyndra has created an unprecedented kind of political limbo for loan guarantees made by the Department of Energy, including three loans to First Solar, and it's an unquantifiable risk for First Solar shareholders.
Those loans may be at risk as an investigative subcommittee of the House Energy committee demands that Energy Secretary Steven Chu provide details by next Monday about 14 loans that are expected to close in the next 9 days as part of the same Department of Energy program that provided $528 million to Solyndra.Emails related to the Solyndra loan suggest the loan review was rushed, and Congressional leaders want Chu to prove that the DOE is not accelerating more loan approvals before the stimulus-package program expires on Sept. 30. First Solar shares also fluctuated earlier this year, when it was not clear if First Solar would receive DOE loan guarantees for its projects. The company's earnings power has become more reliant on large-scale solar projects for which it has received DOE loans. If the DOE loans become political pawns, First Solar's earnings potential for 2012 and 2013 could weaken.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV