Updated from Wednesday, Feb. 10 (Part 2 of a two-part feature on threats faced by underperforming U.S. solar companies)TheStreet) -- With a few U.S. solar firms reporting extremely weak earnings in the first half of the week, now might be the time to question if some of those might lack the time to become competitive before becoming extinct. Wedbush Securities' analyst Christine Hersey, for one, said all solar investors do need to think about whether the underperforming U.S. solar companies can continue to be going concerns. Energy Conversion, for its part, has indicated that its pricing premium will completely erode in 2010. And while it may be premature to sound the death knell, the prudent investor will have to pay more attention to how these companies manage their short-term cash. Energy Conversion has already been in the position of converting cash into inventory and not converting that inventory back into cash sales through the second half of 2009. The situation may be even more dire for Evergreen Solar. Evergreen's debt-to-total assets ratio is at its highest level in five quarters, and after its earnings on Tuesday, the Evergreen management said that the solar company will have to raise more capital. Analysts noted that, given its current financial situation, Evergreen would likely not qualify for traditional lending, and as management said it needs a capital raise imminently, Evergreen will likely pursue a secondary equity offering or convertible deal. Existing shareholders of Evergreen reacted to that news on Wednesday as expected, when shareholders are facing share dilution: Evergreen was down more than 7% and was trading well above its average daily volume -- 5.5 million shares traded versus 3.9 million on an average day. Evergreen's stock price was at $1.19 on Wednesday afternoon, much lower than its price per watt. At least Evergreen has made progress on reducing something.
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