Exchange traded funds tracking solar energy stocks fell over 7% on Tuesday after First Solar (NasdaqGS: FSLR) surprised the market with an announcement that its chief executive is leaving.
Guggenheim Solar ETF (NYSEArca: TAN) and Vectors Solar Energy (NYSEArca: KWT) have 12.3% and 9.1% in the stock, respectively.
First Solar is also held by other alternative energy ETFs, including Market Vectors Global Alternative Energy ETF (NYSEArca: GEX), PowerShares Global Clean Energy Portfolio (NYSEArca: PBD) and iShares S&P Global Clean Energy Index Fund (NYSEArca: ICLN).
The company in a press release Tuesday said Rob Gillette is departing and that Mike Ahearn, chairman and founder, will take over as interim CEO as the board searches for a replacement. First Solar shares plunged 25%.
“The press release is short on details and we believe the news (along with timing of announcement) is likely to raise a lot of investor questions about the health of overall industry as well as near/longer term profitability outlook of the company,” Deutsche Bank analysts said in a report Tuesday. “Yesterday, media reports indicated that negotiations of sale of Topaz project to Enbridge fell through.”
“Since we expect that First Solar will release earnings next week, we believe that this does not bode well for the outlook,” added Cantor Fitzgerald analysts in a note.