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The market cap of all the solar stocks in the industry ($14 billion or so) is about the same as the market cap of Twitter. Pretty baffling to me. If you're a b
by xyzzy4 11y ago
The market cap of all the solar stocks in the industry ($14 billion or so) is about the same as the market cap of Twitter. Pretty baffling to me.
If you're a billionaire and want to be a trillionaire, all you'd have to do is buy every solar company and wait a few decades I bet.
- cjensen 11y agoThere's no barrier to entry on anything solar-related. A wise investor would assume that serious competition will occur prior to reaching a trillion-dollar jackpot.
- xyzzy4 11y agoYou could buy every solar startup as soon as they get to X size. Also hardware startups do have significant barriers of entry.
- rhino369 11y agoThen you'd get stuck buying half assed divisions of a bunch of F500 companies who get into the market just to profit off you. Plus you'd need unlimited capital for this plan. And current solar companies might go bankrupt before solar hits the scale needed to compete with fossil fuels. And the DOJ would sue you for antitrust violations. Standard Oil did your plan. That sort of thing won't be allowed again.
- xyzzy4 11y agoMany solar companies are international. They have highly optimized technology for reducing $/watt that can't be half-assed by Fortune 500 companies. Customer acquisition takes a while.
- BurningFrog 11y agoThis provides a huge incentive to start and finance new solar startups, and gets very expensive for this presumptive monopolist.
- adventured 11y agoThere are in fact barriers to entry on everything solar. It's: political connections, zoning, utilities, regulations, laws. Try putting up a huge solar farm without the right connections and insiders, don't grease the right wheels, see what happens. There's no bigger barrier to entry than that. See: FirstSolar's benefit from being tied to the Walton clan (JWMA / True North Partners). FirstSolar is basically the world's largest independent solar company, is flush with cash, and very profitable. It's not a coincidence they've fared so much better than the rest of the industry. "The Waltons own more than 112 million shares of First Solar, four times as much as the second-biggest shareholder" http://www.thestreet.com/story/11491608/1/wal-marts-waltons-gaining-more-active-role-at-first-solar.html http://www.thestreet.com/story/11491608/1/wal-marts-waltons-...
- JTon 11y agoThis might be saying more about the valuation of twitter than solar
- strommen 11y agoSolar power is a fully-developed technology. PV panels are a commodity that are manufactured mainly overseas. Most of the cost of a new solar plant is in the planning & labor. And it does indeed cost a lot of money to build a solar plant (relative to the amount of money you can sell its power for). That said, solar and wind power are a great way to get consistent (but low) returns on your investment. Look into "solar bonds".
- xyzzy4 11y agoActually returns (on solar companies) will probably be pretty high. See https://en.wikipedia.org/wiki/Swanson%27s_law https://en.wikipedia.org/wiki/Swanson%27s_law and https://en.wikipedia.org/wiki/Growth_of_photovoltaics https://en.wikipedia.org/wiki/Growth_of_photovoltaics Looking at the graph from the first link, what will likely happen is solar installations will grow rapidly to meet the trend line, which means high revenue growth. Solar is also currently priced like it's dying, so there'd also be a price/earnings increase.
- Ntrails 11y agoThe trend line isn't assured and neither wikipedia article is going to guarantee high returns on Solar Energy companies. Past Performance Is No Guarantee Of Future Success. IANAFA but I do hate to see "this will definitely make money because..."
- deleted 11y ago[deleted]