Evergreen Solar (ESLR) and JA Solar (JASO) Stock Drop Significantly Due To Recent Deals With Lehman Brothers

Posted by | # |
08:00:50 am on September 16, 2008

 Shares of both Evergreen Solar and JA Solar have experienced significant loss in value over the past couple of days due to their dealings with now-bankrupt investment banking giant Lehman Brothers. In June, Evergreen Solar lent Lehman Brothers 30,856,538 shares for hedging transactions, and buyers are afraid that Evergreen won’t get the money back for those shares. Prices dropped by $1.70/share yesterday, down to $4.60.

Michael El-Hillow, Chief Financial Officer, released the following statement to attempt to reassure nervous shareholders and potential buyers:

The agreements in question are with affiliates of Lehman Brothers Holdings Inc. that have not filed for bankruptcy protection and are structured to provide Evergreen Solar with as much legal protection as is customarily available in transactions such as these. While the ultimate impact of the situation is expected to unfold over the next few months, we are availing ourselves of all legal remedies to protect our Company and its shareholders in this very fluid situation.

The majority of our cash and short term investments are held by Silicon Valley Bank, our corporate commercial bank. We also have funds on deposit with two international commercial banks. We have sufficient cash to complete our 160 MW Devens facility and support our other operating needs as we drive to profitability in 2009.

In the meantime, JA Solar, who entered a similar deal with Lehman Brothers in May, has also taken a hit. Shares of their stock fell $2.66, ending at $10.44

Tags: , , , ,
If you enjoyed this post, please consider to leave a comment or subscribe to the feed and get future articles delivered to your feed reader.


No comments yet.

Leave a comment