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Toledo
Blade...
First Solar to
be cut from Nasdaq 100 list
Solar panel maker First Solar Inc., whose shares already are trading at
their lowest price in the company’s six-year history, soon will suffer
another indignity — the company is being booted from the Nasdaq 100
Index.
Wayne Lee, a spokesman for Nasdaq OMX Global Index Group, said First
Solar’s removal from the Nasdaq 100, an index of 100 of the largest
nonfinancial companies listed on the stock exchange, will occur Monday.
Nasdaq made the announcement Friday after the market’s close.
Tempe, Ariz.-based First Solar, which was founded in Toledo as Solar
Cells Inc. and which has its only U.S. plant in Perrysburg Township,
will be replaced on the index by Texas Instruments Inc.
Mr. Lee said the solar firm, which was added to the Nasdaq 100 in
December, 2008, was being removed because it cannot meet an index
requirement that companies on the list have an adjusted market
capitalization, or value, equal to or greater than 0.1 percent of the
aggregate adjusted market capitalization of the entire index at the end
of the month.
If a company’s market value slips below the 0.1 percent limit for two
consecutive months, it is removed from the index.
Market capitalization is the total value of a public company’s tradable
shares. It is calculated by multiplying the share price by the number
of shares outstanding.
First Solar’s market capitalization had declined to about $1.8 billion
at the end of the first quarter from $3.08 billion at the end of 2011’s
fourth quarter.
Its stock price, which was $33.70 a share at the end of December, had
fallen to $32 a share at the end of February and $25.05 at the end of
March. Yesterday its shares closed at $20.82 on the Nasdaq market, down
one cent. Until this month, First Solar’s shares had never dipped below
$24.74, the price at which the company’s stock debuted Nov. 17, 2006. A
year ago, it was selling for more than $130 a share.
Texas Instruments has a market capitalization of nearly $36.7 billion.
Jeff Osborne, a solar industry analyst with Stifel Nicolaus & Co.,
said being dumped from the Nasdaq 100 would be a personal setback for
First Solar management, but overall it won’t affect the company’s
operations.
“Investor sentiment will undoubtedly take a hit, given that there’s
shares held in various [exchange-traded funds] and other funds,” Mr.
Osborne said. “But it won’t interfere with First Solar’s business plans
or the transformation of its cost structure.
“Within the company, it’s not that big a deal,” he added.
Mr. Lee said the last company to be removed from the Nasdaq 100 for
failing to meet the 0.1 percent rule was Focus Media Holdings Ltd. in
January, 2009. UAL Corp. was removed for the same reason in July, 2008.
The Nasdaq 100 is similar to the Dow Jones industrial average, but it
does not include financial companies and it can contain companies
incorporated outside the United States. The index, which began in 1985,
is the basis of the PowerShares QQQ Trust, whose investments and
results are based on the Nasdaq 100’s performance.
First Solar spokesman Allen Bernheimer said the company won’t comment
on its removal from the Nasdaq 100. He said First Solar is in a quiet
period while preparing its first-quarter earnings report.
Read this and other articles at the Toledo Blade
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