The problems continue to mount at First Solar (FSLR). After dipping on the news of the Solyndra bankruptcy, shares of the solar power giant have been in a steady decline, which was accelerated by today’s resignation of CEO Robert Gillette.
Though no reasons for the resignation were given, we assume Gillette and the board didn’t see eye-to-eye, or he just wanted to get out before things got completely out of hand. Founder and board chairman Mike Ahearn will become CEO for the interim.
With Europe, one of the world’s largest solar customers, on a clear path towards austerity, we expect demand for solar panels will continue to fall. With demand falling, and First Solar producing panels for a higher cost than their Chinese counterparts, we suspect earnings will further deteriorate.
With shares now trading around $43, we don’t think First Solar is grossly overvalued, but we would recommend staying away from catching this falling knife.