First Solar CEO resigns; stock sinks
10/25/2011 7:07 PM EDT
MOUNTAIN VIEW, Calif.--News that First Solar CEO Robert Gillette had stepped down sent shares in the company plummeting 25 percent on Tuesday (Oct. 25), in a year where the Arizona-based company’s stock has already lost over 70 percent of its value.
No reason was given for Gillette’s sudden departure, but he is the third executive to leave the energy company this year, after First Solar's president of operations Bruce Sohn resigned in April and president of the firm’s utility systems unit, Jens Meyerhoff, left last month.
Gillette had served as CEO of First Solar for the past two years, a time of intense turbulence in the solar industry, in which U.S. based firms faced increasing competition from cheaper Chinese competitors and crystalline silicon producers. Demand for solar panels has also petered off after several European countries ended green energy incentive plans this year.
The industry is also thought to have been adversely affected by the Solyndra scandal earlier this year, in which California based solar panel manufacturer Solyndra took $535 million in federal loan guarantees before filing for bankruptcy and laying off over 1000 workers. Solyndra had previously been singled out by the Obama administration as a strong example to follow in terms of green job initiatives.
First Solar too has received some $3.1 billion from the U.S. government’s Energy Department, and is also thought to be facing job cuts, with analysts predicting a cull of some 10 percent of the workforce due to underutilization of factories.
“We believe the news (along with timing of announcement) is likely to raise a lot of investor questions about the health of overall industry as well as near/longer term profitability outlook of the company,” said Deutsche Bank in a statement advising investors to hold when it came to buying First Solar stock.
First Solar shares on Tuesday had fallen to $43, and the firm’s current market capitalization is thought to be around $4 billion.
The company's chairman and founder, Mike Ahearn, will take on the role of interim CEO while the firm searches for a permanent replacement for Gillette.
The firm will announce its official earnings next week.