Short-sellers flock to solar stocks

Short-sellers have begun flocking to solar power stocks including US-based First Solar Inc. (FSLR.NASDAQ), betting that profits will be hurt by a glut of Chinese panels and shrinking demand due to subsidy cuts in the world’s biggest solar markets, Germany and Italy, Bloomberg reported. This month, First Solar, the world’s largest maker of thin-film solar panels, had a record 23% of its outstanding shares sold short, or borrowed for sale by speculators who hope to buy it back later more cheaply, according to data from Bloomberg. A record 52% of the outstanding shares of Germany’s Q-Cells SE (QCE.ETR) are also being sold short. Four Chinese manufacturers – Trina Solar (TSL.NYSE), LDK Solar (LDK.NYSE), Yingli Green Energy (YGE.NYSE) and Suntech Power Holdings (STP.NYSE) are also being shorted heavily. China’s JA Solar Holdings (JASO.NYSE) and Suntech are leading an industry-wide expansion of factory capacity that will add at least 9.5 gigawatts of new manufacturing lines this year. That will boost global capacity to 41.5 gigawatts, outstripping demand of no more than 28 gigawatts forecast by New Energy Finance.