Sometimes the most important thing in a press release is what they DON'T say. Here's a brief summary of a recent SOLF press release:

- The company secured 3 multi-year framework commitments for over 185MW of photovoltaic modules, with initial shipments starting as early as October 2007. Ok...
- Expansion plans remain on schedule. That's good to know.
- Year-end manufacturing capacity targets remains on track. This is starting to sound good...
- Progress at SOLF's 52%-owned joint venture company, Jiangsu Yangguang Solar, is on schedule. Great!

Moving onto the 300 pound guerrilla in the room: With all the chaos in credit markets, what about your liquidity, SolarFun? Not a word about your cash position?

According to their recent earnings report, the company had about $58 million in cash at the end of Q2. The street is forecasting a Q3 cash burn of $11 million, leaving the company with an estimated $47 million in the bank. SOLF management recently said that capacity expansion will cost around $40 million. Add another $27 million that they will have to pay to expand their joint venture.

Does anyone else hear the alarm bells going off?

SOLF has two options: Get more financing (a lot harder to do now than two months ago), or tell investors that expansion plans are being  scaled back. Both outcomes could hurt the stock price. When it comes to SOLF, I'm going to opt for the handshake at the end of the date.
 
Disclaimer: I do not own SOLF, and I don't own a solar panel, but I do have two tickets for the Chemical Brothers gig on Friday night at Hammerstein Ballroom. If you want to be my date, email me! ;-)

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Eben Esterhuizen  SOLF  Solar Energy 

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