Solar Power, Inc. (OTCMKTS:SOPW) Continues Correcting
In just a couple of months the stock of Solar Power, Inc. (OTCMKTS:SOPW) was able to form one impressive chart pattern running from around 25 cents to a high of $2.95 posted in late-October. Although the stock suffered a significant crash after that it was able to recover returning to $2.60 on November 24. The amazing ascent was fueled by the company’s numerous acquisition announcements in multiple countries across the world.
On that date though SOPW revealed their decision to part ways with their current accounting firm Crowe Horwath LLP and to engage KPMG Huazhen as their new accountant. Since then the stock has been sliding down the chart and it seems that the negative momentum is gathering more and more speed. Yesterday the ticker wiped another 13% of its value and dropped to $1.83. In less than three weeks SOPW have lost 30% of their share price.
Crowe’s dismissal was linked to the fact that in the audit reports for 2012 and 2013 the firm raised questions about SOPW’s ability to stay in business. If there are legitimate reasons for concern we don’t know if simply changing the people that make the audits is going to resolve them. And there certainly are some serious red flags around Solar Power.
Almost all of their acquisitions have involved the issuance of millions of shares and as a result the dilution of the common stock has reached alarming levels. Just for the period between August 19 and November 13 the number of outstanding shares grew from 334 million to over 541 million. Earlier this year 136 million shares were issued at just $0.16 followed by another 92 million sold at $0.27. More recently during two private placements of stock millions of shares saw the light of day at $1.17 and $1.38 which was still considerably lower than the market price.
On October 21 the largest shareholder of the company – LDK Solar Co., who owned around 30% of SOPW according to the latest financial report, filed for bankruptcy. As of September 30 the company had accounts payable to LDK amounting to $34 million.
Although at least some of SOPW‘s recent decline could be attributed to the negative influence of the volatile oil prices the company remains a risky choice even on its own. Not to mention that lately the PRs about new acquisitions seem to no longer be effective. On December 5 the company announced their plans to acquire and develop a solar project in New Jersey but on that day they corrected by close to 4%. That is why any trades involving the stock should be preceded by extensive research and careful planning.
