So, what exactly is involved in calculating solar panels cost in Mission Bay? When thinking about solar power very few people know the way the cost of solar panel systems is actually measured. Or even, for that matter, do we automatically grasp the connection relating to the cost of solar power and the value of solar power. We all know that gasoline prices are in dollars per gallon. We likewise are all aware of approximately how far we’ll be able to drive after spending 40 bucks for a tank of gas. In contrast to a tank of gas, the value of which can be consumed pretty much instantly, solar panels deliver their value across a period of time.
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Solar Power, Inc. (OTCQB:SOPW): Why this $1 Billion Company Could Fall By More Than 80%
When a stock rises from $.25 a share to close to $3.00 a share in a little over 3 months, it's bound to get your attention. Naturally, I became curious as to the catalyst that is driving this move and most importantly, is the share price sustainable. After looking into the company further it became very apparent that the company is significantly over valued with a market cap of $1 billion. With the stock price at $2.40 per share, investors could potentially lose 80% of their investment (or more).
The company currently reports having 334 million shares outstanding within their most recent 10-Q filing. Buried within the filings are a number of toxic debt conversions that could adversely affect the company's share price in the future.
In the second quarter of 2014, the company increased the amount of authorized shares from 250,000,000 to 1,000,000 shares. Around the same time of the increase in authorized shares, the company issued 40,625,000 shares of common stock to a non-U.S. investor at a price of $.16 a share (Source: 10-Q Filing)
In July 2014 the Company issued a large number of shares via a convertible bond and a private placement at a deep discount. 68,750,000 shares of common stock were issued at $.16 per share along with another 26,562,500 shares of common stock at $.16 per share.
Since the period ending June 30, the company entered into yet another agreement to sell 92,620,000 shares of common stock at a price of $.27 per share. This private placement was concluded on September 17 and increased the number of outstanding shares to a total of 426,771,956 shares.
In total, the company has issued 135,937,500 shares of common stock since May at a price of $.16 per share along with another 92,620,000 shares at a price of $.27 per share. During this same time, the share price has increased from $.20 per share to $2.40 per share, and increase of over 1000%. Since the 92 million private placement took place after the period ending on June 30, 2014, the actual number of outstanding shares is over 425 million shares. At a closing price of $2.40, this puts the current market cap of Solar Power, Inc. over $1,000,000,000.
LDK Solar Co. owns 42.4% of the Company's outstanding shares as of August 19, 2014. On October 21, LDK Solar Co. filed for bankruptcy. Despite the large number of positive press releases produced by the company, they have failed to disclose this material fact.
In addition to the bankruptcy of the Company's parent company and majority shareholder, the Company also has accounts payable due to LDK Solar Co. of $38.7 million. The Company admits within their filings that should LDK Solar demand payment (which is likely due to their bankruptcy filing), that they do not have the ability to make payment without additional sources of financing. With the recent increase in authorized shares, it can be reasonably concluded that Solar Power Inc. will need to dilute shareholders even further in the future.
(Source: 10-Q Filing)
Solar Power Inc. lists their phone number at otcmarkets.com as well as their own website at solarpowerinc.com. The two phone numbers listed are 916-770-8100 and 800-548-8767. Both of these phone numbers will not connect you to the company and will instead put you into a voicemail for a "Susan Carter." Susan Carter appears to have no affiliation with the company whatsoever.
With 426 million shares outstanding, the current market cap of Solar Power, Inc. is over $1 Billion and the company does not even maintain a working phone number. For this reason, along with the many other red flags that exist, we urge investors to take profits immediately before it's too late. Also, with the number of red flags that exist along with the billion dollar market cap of the company, it is very likely regulators will take notice which will then put the stock at a serious risk of a halt.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.
Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.