LDK Solar Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of solar manufacturer LDK Solar (NYS: LDK) fell 10% in early trading after cutting guidance and being downgraded by an analyst.

So what: LDK cut full-year revenue guidance to between $2.2 billion and $2.25 billion, down from a range of $2.5 billion to $2.7 billion. That was enough for analysts at Kaufman Bros. to downgrade the company to a sell rating.

Now what: The stock recovered after plunging at the open because the news today isn't really anything investors didn't already know. Nearly every solar company has lowered guidance or missed estimates recently, and considering that LDK isn't a market leader, the same should have been expected for the company. I've said in the past that LDK is likely to be in real trouble in the near future, considering the company's high debt load, and I certainly wouldn't see today's price drop as a reason to buy the stock.

Interested in more info on LDK Solar? Add it to yourwatchlist.

At the time thisarticle was published Fool contributor Travis Hoium has no position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.