LDK Solar Shares Slide as ThinkEquity Downgrades to Sell
LDK Solar (LDK) shares are trading sharply lower this morning after ThinkEquity analyst Jonathan Hoopes cut his rating on the stock to Sell from Buy. He cut his target price on the stock to–get this–$4.50, from $45.
The more bearish stance follows an earnings warning from the company earlier this week. Hoopes points out that the company’s $210 million to $220 million inventory write-down raises new concerns about a 2007 controversy involving allegations over inventory accounting issues.
As Hoopes notes, in October 2007, former LDK controller Charley Situ alleged discrepancies in the company’s accounting for “possibly unusable inventory.” In December 2007, he recalls, LDK announced that an investigating committee found no material errors in the company’s state silicon inventory and said that a provision for obsolete or excess silicon feedstock was not required.