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First Solar Takeover Chatter Is Overdone

Stocks in this article: FSLR SPWRA LDK

NEW YORK ( TheStreet) -- Not a day passes without more rumors -- mostly baseless, if at least logical -- about the impending takeover of U.S. solar company First Solar (FSLR).

It's getting a tad ridiculous. Let's get one thing clear: First Solar probably will be taken over one day, but whether that day comes tomorrow, the day after tomorrow, a year or two years from now is anybody's guess. The recent balance sheet problems that First Solar has run into -- as a result of the larger woes of the solar sector -- and the fact that it's market cap has cratered, are not a priori proof that a deal is imminent.

The bulls on Wall Street and the traders who need to move a First Solar position drop some anonymous rumor about GE (GE) getting ready to acquire the solar company. Certain outlets do a great job of printing these anonymous rumors and allowing traders to execute on their needs. Conversely, a short will put out a rumor that First Solar is headed for bankruptcy.

First Solar takeover chatter is logical, but a bit overdone.

I wouldn't bet on any of it. The First Solar takeover rumors are part and parcel of the games people play in this market. A year ago it was Siemens (SI) getting ready to make a bid on First Solar. Now it's GE, which on Friday will be ribbon-cutting its Colorado-based thin film solar manufacturing plant, with Secretary of Energy Steven Chu in attendance fresh off his congressional grilling over Solyndra.

Might GE acquire First Solar now that it's planning its entrance into the thin film market where First Solar dominated? Yes, no doubt, I'm sure the idea has crossed the mind of GE executives. Does that mean it is going to happen tomorrow? Not likely. Or maybe. Who knows? The point is there are as many reasons to doubt a First Solar deal happens any time soon as to think one will occur.

Consider this: The Wall Street analyst report that is being quoted this week as a sign of the impending takeover, by Aaron Chew of Maxim Group, is anything but a conviction call on a First Solar deal. On the morning that Chew released his report earlier this week, TheStreet spoke with the analyst, who was somewhat perplexed by the attention. In fact, Chew told us that he would bet the odds are 85% against a First Solar deal happening any time soon.

So why did he write the report? Given the recent balance sheet woes of First Solar and the huge decline in its share price, it's a logical question to ponder. No more, no less, that's an analyst doing his work -- even if some of the shorts who hadn't closed their First Solar books probably didn't like it. Shortly after Chew's report there were claims of a First Solar bankruptcy on the horizon -- maybe those remaining FSLR shorts kick back into action, and then the unvirtuous cycle of Wall Street shenanigans and double speak is complete at least for a day or two when some First Solar shill like Lazard Capital et al appears on CNBC another of this week's solar rumor-mongering moments to sing First Solar's praises.

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