TSL, like other solars, has to expand itself to attain economies of
scale. It plans 500% expansion in 2008 alone and needs a lot of
capital. TSL had to raise funds early this year before worldwide
credit crunch. I bet TSL may have to raise capital and dilute your
shares again this year. Solar business is a game of securing
polysilicone at lowest possible cost comfortably (as all other costs
are similar to everybody) and you bet they need a lot of working
capital to do this. Without mount of cash, your buying term is
inferior to peers. Convertible is dilutive to your shares. Do not
sell your shares on the first days on the shelf, as convertible
investors short them to hedge. Wait few days and the price usually
returns. TSL is traded at lower PE than peers because of this working
capital constraint. I hope TSL earn at least $3 during this year, and
if they do, their share would worth at least $45. By then, two oil
guys, George and Dick will be gone. TSL is a high beta stock and I do
not recommend it to those with weak hearts. I recommend STP instead
to them. I think downside risk from this level is limited. I hold
TSL.
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