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First Solar, Inc. 


The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the District of Arizona on behalf of those who acquired First Solar, Inc. (“First Solar” or the “Company”) (NASDAQ:FSLR) common stock from February 22, 2019 through February 20, 2020, inclusive (the “Class Period”). Investors have until March 8, 2022 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
 
First Solar is a manufacturer of solar energy panels and powerplants. First Solar’s business is comprised of multiple segments. The modules segment (“Modules”) manufactures photovoltaic (“PV”) solar panel units, which are then installed at project development sites or sold to third parties. The Company’s project development segment (“Project Development”) buys land, develops sites, installs solar panel units, and then sells the entire site to a buyer, typically a utility provider or large tech company.
 
Prior to the Class Period, in 2017, First Solar launched a new PV solar panel module, the Series 6. At the beginning of the Class Period, First Solar laid out an “aggressive” Series 6 cost per watt reduction target.
 
On January 15, 2020, Barclays reported that, among other things, “First Solar ha[d] seemingly been, in large part, priced-out of the U.S. downstream solar market,” and that the Company had concealed its rapidly declining market share through misleading financial reporting. According to analysts at Barclays, First Solar was obfuscating this fact by improperly reporting its Project Development pipeline to make it seem like the Company maintained a stronger market share, despite the fact that some projects on the pipeline had been completed in prior years. On this news, First Solar’s stock price declined by $4.03 per share, or approximately 6.86%, from $58.78 per share to close at $54.75 per share on January 15, 2020.
 
On February 6, 2020, Barclays issued another report and suggested that, in an attempt to gain back its market share, First Solar was “bidding more aggressively, leading to lower [Project Development contract] prices, and finally cutting into margins.” On this news, First Solar’s stock price declined by $0.45 per share, or approximately 0.85%, from $53.10 per share to close at $52.65 per share on February 6, 2020.
 
On February 20, 2020, First Solar announced that it was exploring a sale of its Project Development business. On the same day, First Solar acknowledged it was experiencing “challenges with regard to certain aspects of the overall cost per watt” and that the Company would not be realizing its cost per watt goals, despite having previously represented that it had been “slightly ahead of” its goals as recently as the previous quarter. Following this, the Company stated that it would no longer be disclosing a discrete cost per watt for its Series 6 units. When asked by an industry analyst to further explain the decision to no longer provide discrete cost per watt data, First Solar executives claimed that customers had “start[ed] to hold [the Company] accountable to a cost-plus model . . . [a]nd so we have purposely moved away from giving a discrete cost per watt.” On this news, First Solar’s stock price declined by $8.73 per share, or nearly 14.72%, from $59.32 per share to close at $50.59 per share on February 21, 2020.
 
The lawsuit alleges throughout the Class Period, Defendants made false and misleading statements that failed to disclose that: (i) the Series 6 module was grossly underperforming and was unable to hit its wattage targets; (ii) when the units installed at the Project Development sites were unable to produce the contractually mandated wattage target, additional units needed to be installed – an additional cost borne by First Solar; (iii) when additional Series 6 units had to be installed at Project Development sites to compensate for the insufficient and inconsistent wattage, rather than properly charging the costs of the additional Series 6 units to the Modules segment, the Company instead improperly booked the cost of the additional units to the Systems segment; and (iv) as a result of the foregoing, Defendants’ positive statements about First Solar’s business, operations and prospects were materially false and misleading and/or lacked a reasonable basis.
 

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