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Subject:  PWER down 9.3% yesterday Date:  3/1/2011  10:30 AM
Author:  TMFGebinr Number:  254 of 1287

I couldn't figure out why, especially seeing the 1.34 million shares traded in the 5 minutes ending at 1:14 pm yesterday (and the 3.24% drop that happened in those 5 minutes). Then my colleague Matt Argersinger suggested I look at the Yahoo! message boards, which he's found helpful at times, despite their feel.

Well, it worked. Barron's reported ( that First Solar shares were sliding because of a report of a draft proposal that could limit subsidies for solar installations in Italy. Italy is a fairly large market for Power-One, in case you didn't know, accounting for 19.6% of revenue in 2009 (the latest 10-K isn't out yet).

Thus the share price drop. What surprises me is the sudden decline starting about 12:40 pm considering that the draft proposal was reviewed in the Italian press over the weekend. Market inefficiency, I guess.

Even though the market doesn't believe it, I feel that the situation in Europe, specifically Germany, now Italy, and prior to that Spain, is short-term in nature. My "short-term" is a bit longer than others, however, as it could hurt the company for a year or more. However, as I have noted previously, Power-One has seen this coming and has been moving to broaden its geographic coverage, opening new plants here in the U.S. and in China. While that won't prevent the damage from Europe, it will mitigate it. We'll see what happens over the next quarter or two (or three).

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