(Power-One story updated for Monday trading action, CEO interview)NEW YORK ( TheStreet) -- Solar inverter company Power-One ( PWER) continued its slump on Monday. After declining 22% on Friday, shares of Power-One were down 5.5% on Monday, and again, the negative trade was heavy. More than 16 million Power-One shares traded hands on Monday, versus an average day of 6 million shares. 35 million Power-One shares were traded on Friday. The Monday trading action in Power-One shares reinforces what analysts, even those who remain bullish on the long-term for the high-flying -- and highly shorted -- solar company, were telling TheStreet last Friday: the stock is "dead in the water" and a "dead money" stock for at least a quarter. The case can be made that Power-One shares are inexpensive -- after the 27% dip in the past two trading sessions, Power-One shares only trade at 8 times earnings -- yet the case can also be made that Power-One has officially joined the rest of the volatile solar sector in compressed multiple-land. Most of the Chinese solar stocks trade between 4x and 8x earnings. The critical issue for Power-One is how fast it can work through the inventory glut that it said has caused a revenue shortfall for the first quarter, and how well pricing will hold up as long as an excess supply of inverters exists in the market. Power-One said the two things in its 2011 outlook that are more or less the recipe for a selloff in volatile solar. The solar inverter company said that feed-in tariff declines and excess inventory are going to cause a less-than-expected revenue performance from the company, and even though Power-One wouldn't say specifically, solar margins will be down.
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