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Solar industry investing: Is XsunX (XSNX) the real deal?
Today's Financial News - Posted November 26, 2008
We have been here before. XsunX issues an intriguing press release, investors flock to the stock and then nothing happens. The company has been promising big news for years, but we still have yet to see any real advances. Is this what we have been waiting for?
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): He is either going to be a hero or an absolute zero. For nearly three years now, Tom Djokovich, the CEO of XsunX (OTC:XSNX), has been promising investors that his fledgling solar panel manufacturer was on the cusp of a major sale.
When I talked with the executive early in the winter of 2005, he kept the company’s official word that it would have its first sale by that spring. Investors flocked to the company, speculating big gains were on the way.
The alternative energy boom was just starting to gain traction and investors believed XsunX was going to be a huge winner. Shares soared from less than $0.25 to almost $3.00 from June of 2005 to April of the following year.
The orders never came.
Share price has been dropping ever since. In fact, investors recently had to endure the pain of 52-week lows below $0.18. The action has not been pretty.
Solar manufacturer or P.R firm?
The decline in valuation is certainly not for a lack of trying on behalf of the company’s public relations team. For the past two years, every new hire, new supplier contract, new investment and even the company’s attendance at industry conferences has been pumped through the media engine.
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The shoddy releases were from a desperate company making desperate moves. Investors eventually grew tired of the failed promises and lack of any real information. The more press releases XsunX issued, the further its price dropped.
It is no wonder investors are desperate for answers after yesterday’s announcement. XsunX actually announced a major order. It has entered a two-year contract with a solar power company working on projects in California and Hawaii.
According to XsunX, in exchange for $37 million, the company will supply 15 megawatts worth of its solar modules. A third of the order will be filled in 2009, with the remaining 10 megawatts supplied in 2010.
That is about all the company has said on what should be a monumental subject. It has not mentioned how it will produce the modules or where it will find the cash flow to being operations. After all, its newly leased 90,000-square foot production facility, which is undergoing major renovations, appears nowhere close to being complete. The last I heard, production was not supposed to begin until April of 2009.
Not buyin’ it
It was no surprise to see shares of XsunX jump on yesterday’s news, from $0.19 to $0.25. After all, this company has a long history of getting positive attention just when investors believe the end is near. But if investors truly believed in the company, its management and its products, shares would have climbed even higher.
With almost nothing left in cash, an array of expenses and no hope of finding ample credit in this market, I remain leery of this company’s future success.
Yesterday’s news, if it turns out to be the real deal, could be the company’s saving grace, but we have been here before.
If you are looking for an ultra-speculative play, this is it. As for me, however, I am waiting to see what comes next. If the company can make it through next spring, I will be investigating the situation again. For now, it looks like yet another costly trap.
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3 Responses to “Solar industry investing: Is XsunX (XSNX) the real deal?”
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February 4th, 2009 at 1:08 pm
The most current picture of XSunX is readily available in their 10-K report filed Feb 2, 2009:
http://idea.sec.gov/Archives/edgar/data/1039466/000114420409004524/0001144204-09-004524-index.idea.htm
February 3rd, 2009 at 1:10 pm
I’m not sure I follow what you are saying Earlylight… purchasing stock could not be easier by simply using the ticker tymbol xsnxe (previously xsnx) and any of the popular on-line investment brokers. Being “approached” to purchase 33,000 shares in 2005? Dealing directly with XSunX in the purchase of company shares? You’ve peaked my interest… please provide your source for “finding out” about the “boiler house in Spain”. And with 189+ mil shares in circulation… why would you believe 33,000 shares will encourage investor relations to respond to your letters and phone calls? I will stop short of wondering if your comment…
January 8th, 2009 at 6:22 pm
I feel very dubious about about the integrity of this company. I was approached in 2005 and agreed to buy 33,000 shares from what (I later found out ) was a boiler house in Spain. However, at the time I checked on the web and the technology sounded interesting. I received a contract directly from XSunX but although the amount of money was the same the number of shares shown were only 10,000 - I refused to send payment and received a new contract for the 33,000 shares with payment being made directly to XSunX. After a long wait and many ignored telephone calls - you can only ever leave a message with investor relations - I received a certificate for only 10,000 restricted shares. Despite many letters - some sent by recorded delivery - and repeated phone calls I have never received an acknowledgement and am left wondering if this company is part of a gigantic scam.