Why LDK Solar's Shares Dropped

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 LDK Solar fell 11% today after the company issued its first-quarter earnings report.

So what: Sales during the quarter were just $104.3 million on shipments of 240 MW of wafers and 31.4 MW of cells and modules. Net loss was a whopping $187.1 million, or $1.21 per share.

Now what: LDK has nearly $3 billion in debt and a $58 million quarterly interest expense to go along with it. With just $104 million in sales there's no way to pay off that debt, and the only possibility for survival is a bailout from China. The company may not fail the way a U.S. company would; it's propped up by Chinese banks and is not a company any investor should be betting on right now.

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The article Why LDK Solar's Shares Dropped originally appeared on Fool.com.

Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.

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