Tiger Global is seen very rarely in short disclosures from European countries, and that is noted here because fellow Tiger cubs have quite a number of bearish bets in European equities. However the hedge fund founded by Chase Coleman has bet against a couple of names in German companies. Tiger’s best bet has been against SolarWorld AG (FRA:SWV). Germany’s largest solar panel maker has become a microstock since it lost the major chunk of its market cap in 2011. For the year, SolarWorld is down 70 percent, bringing profits for shortsellers like Tiger Global, Alden Global and Cape View Capital. According to its restructuring plan, SolarWorld AG (FRA:SWV)’s shareholders would lose 95 percent of their holdings in the company after Qatar Solar S.P.C buys a 29 percent stake in SolarWorld.
Tiger Global – German Solar Industry Under Storm
Renewable energy is a frequently shorted sector in Germany and also a successful bet. Ennismore Fund has a 2.4 percent short bet in Conergy AG (FRA:CGYK). Conergy filed for bankruptcy last week, pulling shares down 70 percent. Conergy amassed a market cap of $2.8 billion two year ago which has now come down to only $21.3 million. The other shorts in the sector include Global PVQ SE (ETR:QCE), a negative bet of Tiger Global. Global PVQ SE (ETR:QCE), formerly Q Cells, also filed for bankruptcy earlier.
Cheaper Chinese Solar Panels
The sad tale of German solar panel producers also has China to blame for. Chinese companies started making photovoltaic panels at much lower costs than German companies, thus shaking the business of Germany’s star industry. The renewable energy market is oversupplied with cheaper models from Chinese manufacturers which has crumbled the once booming Solar industry of Germany. Revenues from Germany’s solar sector have declined to $9.53 billion in FY2012 from $15.2 billion in 2011, the sector employed 110,900 in 2011 which reduced to 87,000 in 2012.
SMA Solar Technology AG (ETR:S92), the only German company that is doing better than its competitors, is a short bet of Barrington Wilshire and Sothic Capital. Shares are up 16.7 percent YTD.
In the U.S., First Solar, Inc. (NASDAQ:FSLR) has been an over shorted stock. First Solar, Inc. (NASDAQ:FSLR) was a profitable short bet of Jim Chanos, who shared his thesis on the solar sector in mid-2011, nailing the decline of the solar industry. Most of the companies in the solar industry that trade in the U.S., such as SunPower Corporation (NASDAQ:SPWR), Trina Solar Limited (ADR) (NYSE:TSL), and Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE), have recovered by over 50 percent in this year. As China has its own crisis to deal with, analysts are predicting that a recovery in this sector is in the books.