Apple and GE are buying back stock because they have money in the bank and solid positive cash flow. First Solar has nearly $1 billion dollars in the bank, and based on the midpoint of the company's 2013 guidance of $4.25, it should add more than $250 million, bringing the total cash to more than $1 billion dollars without an offering.
Why does First Solar's leadership believe a billion dollars isn't enough and that it needs to increase the size of their checking account?
On possibility is that management thinks the stock is overvalued so the company should raise capital now while it can. Another is that First Solar wants to position itself to make acquisitions while the market is depressed.
The company also stated that the funds may be used for general business purposes. After considering the cash and cash flow position of the company, investors shouldn't be surprised to find a company or two being bought out.
The key is to find which companies if any are likely takeover targets. Possible targets will be the subject of a future First Solar article, but in the meantime, if we learned anything from yesterday's announcement, we know First Solar's forecast is anything but clear. At the time of publication, Weinstein had no positions in stocks mentioned. Follow @RobertWeinstein This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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