Why LDK Solar (LDK) is not a buy

Well you fail to mention why LDK is being held down .Do to the fact it's a "heavily" shorted and naked shorted stock by big hedge funds many caught from shorting in the 20's
I suspect a little bias motive in this blogging towards the shorts . This company if you look at there earnings and foward guidence is way under valued . This stock has been unfairly beaten up by some analysis,who I suspect are on the short side.
I agree it's not a good stock to invest in short term because it's range bound ,but being long and patient it will pay off.

I challenge you to compare margins (better then most), growth, P/E, accounting practices (vindicated by the external auditors) to any of the other "Sprinters". Their leadership seems pretty savvy and are securing their supply chain as well as future orders. The accounting discrepency was on the order of a disagreement on how to value recyclable poly stock and was on the order of $20 million. They sell around 1 billion dollars worth of product a year. True, their margins are declining which is why the fact that they had the foresight to make a huge capital investment to create their own poly plant as a hedge against increasing costs.

First Quarter 2008 Financial Highlights:

-- Revenue of $233.4 million, up 21.1% quarter-over-quarter;
-- Signed 6 long-term wafer supply agreements since the beginning of the
year; and
-- Total wafer shipments increased 27.6% to 119.2 MW in the first quarter.

There is certainly a risk in owning this stock that it will languish for a while because people are sheep but in the long term their P/E and growth is one of the best in a fledgling industry. I'm greedy when the rest of you are fearful.

"And then you have all the sketchiness. Yes that's a very technical term because it doesn't matter whether I'm referring to margin, business model or accounting concerns, LDK Solar is sketchy. "

How about if you keep it to the present known facts rather than spin BS.

Margin is great in the Industry, Accounting Concerns are past (are there claims against KPMG that I haven't heard of), and business model is great too (they got the jump on alot of competition in signing the contracts to get them the production. Trina, for instance, signed onto poly production too late, and their projected date for any poly was around 2012 because of it).

The short argument against LDK is 95% BS, and as such, if there is any true value to market principles, LDK will correct, and when it does it's going to be a doozy.

I am basing this article on present facts--as represented by hardcore research combined with technical analysis. The market doesn't care whether or not you think it's undervalued and it certainly doesn't care how confident you are that these overarching themes "are in the past". Judging from the price action--the only reliable indicator in this crooked industry--those concerns are very much in the present, hence my article. Class dismissed.

Tim
http://www.timothysykes.com

It would be helpful if the authors on this site were required to be more specific in their details... like mentioning the current price of stocks as they write about them. That way readers could check the ongoing prices to see which "experts" are full of shit when they pump a stock, or attack one, by the subsequent performance of the stocks.

A key part of an investor's due diligence requires checking out the reputations of the so-called experts, most of whom are simply writing about stocks they have a personal financial interest in.

Mr. Sykes is a prime example. Someone who pumps himself and his short trade business, based on his past track record during the bubble years, rather than his current performance in a much different marketplace. He's merely the flip side of a pump'n'dumper, relying on his influence over naive investors to feather his own nest.

The only sure thing about Sykes's recommendations is that just as many of the lemmings who follow him on his short trading path get nailed for losses as the naive longs he crows about.

Timothy Sykes has proved that he himself is either an idiot or a tool for the Wall Street gang. Sykes said: "And then you have all the sketchiness. Yes that's a very technical term because it doesn't matter whether I'm referring to margin, business model or accounting concerns, LDK Solar is sketchy."

This kind of rampant "rumor-making" should be briefly exposed:

(1) Margin: LDK has the highest margin among the PV wafer manufacturers. Even at the current (2008 Q1) gross margin of 28%, it is still much higher than Renesola's 17%, which is touted as a buy by Jess Pichel of PJ. (There is no doubt Pichel is a "friend" of Sykes.) In fact, nobody in the PV industry currently has better margin than LDK Solar except First Solar. It is very likely that LDK Solar will exceed First Solar in gross margins starting in 2009-2010.

(2) Business model: LDK's rise in the photovoltaic (PV) industry is truly unbelievably outstanding. In just two years, the revenue has risen to $684 million (TTM), and it will cross $1 billion this year. Quarterly revenue growth (year over year) is more than 200%, quarterly earning growth (YOY) is more than 100%, it has sold out all the production in the next two years to major solar panel manufacturers around the world, including Q-cells, the solar giant in Germany in a multi-billion deal. Furthermore, LDK is currently building its own polysilicon plants in order to become the leader in the upstream of PV industry. Ambitious? Yes, but one has to admit that the vision and execution of LDK's business model have been nothing short of spectacular. Yet Sykes calls it "sketchy"!? Sykes is not another average John Q. Public the "bagholder" investor. He must have done his home work before blogging on a stock. It is simply impossible that Sykes does not know the information I mentioned above.

In fact, no later than 2009, the Wall Street gangs represented by PJ's Pichel and Barron's Alpert can no longer attack LDK Solar based on their unbelief in LDK's new polysilicon plants. They will find other ways to attack LDK Solar for sure, so I will be happy to revisit this blogger's site to see what Sykes would echo the gangs' new tunes.

(3) Accounting: Sykes must understand the so-called accounting (inventory) issue was completely a conspiracy manufactured out of thin air. It has been cleared by an external audit team headed by one of the big four U.S. accounting firms in December of 2007. Even the SEC has formerly dropped any inquiry into the issue in March, 2008. Yet Sykes still continues to perpetuate the vicious rumors and accusations in May, 2008. Sykes, Do you know that you may be sued by the accounting firm or LDK Solar for spreading the rumor even after all accusations have been officially cleared? Do you have the guts to stand by what you said and inform the FBI and the SEC that LDK Solar "accounting irregularity" is another Enron case in the making? If you do, please inform us of your progress in this patriotic effort. Because whoever audits LDK Solar will surely be axed by the U.S. government just like the accounting firm Aurther Andersen. You will get a Pulitzer Prize as a result.

In a era of worshipping money and "success", maybe Sykes can be proud of his success as a previous hedge fund manager and of making tons of money. Fine. But this blog attacking LDK Solar is so revealing that Sykes has nothing to be proud of. He does not even bother to collect the basic information before making serious conclusions and accusations, or he is associated with the Wall Street mafia groups which specialize in making money by naked shorting stocks of firms with a small number of floating shares, such as LDK Solar.

Keep it up, Sykes. Let's revisit your blog in early 2009 and compare what you said with what LDK has been doing.

Sykes said in his reply on May 15, 2008:

"I am basing this article on present facts--as represented by hardcore research combined with technical analysis."

Well put, Sykes the genius. You could be exonerated if you had told us that you did not know what you were saying. But you have "done your homework" and those bogus "concerns" (margin, business model and accounting issues) are your hardcore research analysis, hence you have no way to crawl out of the hole you have dug for yourself. The only crookedness you mentioned in the post is your own.

The so-called research uses an ever changing, out-of-nowhere criterion on LDK Solar (margin, accounting, inventory, new plant schedules, government subsidy, you name it), yet uses a completely contradictory criterion on LDK Solar's competitiors in the same industry. If such kind of manipulations can be called "research", any garbage can be accepted as "research."

Lastly, the fall of the U.S. financial industry in 2008 and beyond is a direct reflection of the quality (actually lack thereof) of the kind of "research" and analysis you and your buddies in Wall Street have contributed.

Maybe you guys have never believed in the basic principle of "no free lunch" in economics. We will be glad to watch the unraveling of the crooked financial industry from here. Good luck to you, pal. It is only the end of the beginning.

LDK jumped from 35 to 47... gained more than 30% in less than 2 weeks... that is from the date (5/14) Tim called LDK "very bearish... and predicting this stock will need many more weeks or months to break $40"...

Thanks for cameron walker for explaining why LDK is a good stock worth for long term holding...

You guys really should get reading glasses...this is a key statement:

"It's so bearish that I suspect that unless solar plays really heat up again, this stock will need many more weeks or months to break $40"

Solar plays did light up, not because LDK was or is anything special, in fact it continued to lag strong solar plays like SOLF and CSUN which both doubled.

Class dismissed.

Tim
http://www.timothysykes.com

Tim, from the time frame between 5/14 to 5/28, LDK jumped more than 30% while most other solar stocks went down (fslr, stp, spwr, jaso etc.)or stay flat...

During this period, CSUN and SOLF went rollercoaster but then return to where it was two weeks ago... CSUN (11-12) and SOLF (20 to 21), only LDK hold its gains (from 35 to 45)...

You have many good calls on playing small stocks... but the call on LDK is wrong and many institutional investors are buying LDK in recent weeks because of its huge growth potential...

all these small solar stocks such as CSUN, SOLF, TSL, SOL... will have more runs later simply because they will beat estimates in future Q reports... enjoy the rollercoaster rides...

Tim Sykes should return to this board and address the outstanding 2008 Q2 earnings of LDK Solar just released today (August 11, 2008).

But I won't hold my breath. Sykes could have shown his accountability by answering my specific points in the comments on May 15. Yet he chooses to say nothing and ignore my challenging questions altogether.

Maybe he should be dismissed, instead of "the class."

August 11, 2008: LDK 2008 Q2 earnings release provides a solid proof of its high-growth business and excellent execution. Let's go through the numbers briefly:

=====================

LDK Solar reported a net income of $149.5 million, or $1.29 per share, up from $49.8 million, or 45 cents per share, in the same period last year.

Quarterly net sales more than quadrupled to $441.7 million from $99.1 million last year.

Analysts had expected earnings of 42 cents per share on revenue of $282 million, according to StreetInsider.com.

The company on Monday also projected that it will ship between 210 megawatts and 220 megawatts of wafers in the third quarter, bringing quarterly revenue to between $486 million and $496 million.

In a conference call, LDK said it expects its margins to continue to slip in the third quarter to around 23 percent, then to improve again in the fourth quarter based on its own production of solar-grade silicon.

The company said its production would begin shortly, and forecast production of between 100 and 350 metric tons of polysilicon from its first plant, expected to reach a capacity of 1,000 metric tons by December, this year.

=================

In summary, this Tim Sykes' so-called "Sketchy company" has been telling the world a totally "incredulous" story of its business performance. It is even more suspicious that almost all the major Photovoltaic solar companies around the world have been beating on LDK Solar's door and signing mega deals with LDK Solar since last summer.

Hah! Shall we say that these leading solar cells and panels manufacturers will be sorry (and go bankrupt) because they don't listen to Tim Sykes dire warnings that LDK Solar is a "sketchy" company. In addition, shall we say that Tim Sykes is simply too humble to accept my suggestion that he should grab a Pulitzer Prize for uncovering the biggest malicious business scandal since Enron?

Congrat to LDK shareholders, with your afterhour gains, you are now breakeven since my article whereas if you've been following my blog/alerts, you'd be up in excess of 40%. LDK is still a sketchy company and I still wouldn't have bought it back in May

Your humble blogger,

Timothy Sykes

http://www.timothysykes.com