Real Goods Solar, Inc. (NASDAQ:RGSE)
Real Goods Solar, Inc. (NASDAQ:RGSE) stock is up almost 300% as the market enters the last half of the trading day. RGSE shares hit resistance around $3 in mid-day trading but have since been testing the $3.20 handle. Traders jumped on news from Real Goods Solar, Inc. (NASDAQ:RGSE) that they have signed a licensing deal with Dow Chemical (NYSE:DOW) for their Powerhouse solar shingles. Volumes have been immense. Should the trend continue throughout the day, RGSE shares will trade over 450 times their normal daily average of just over 142,000 – as of this writing, over 32.7 million shares have traded.
DOW Chemical’s Involvement
In 2008, DOW Chemical started an R&D effort to produce shingles that could serve as a solar panel and be directly integrated into a roof. DOW’s first efforts were installed in over 1,000 locations in 18 states. Then, in 2015, DOW switched to a lower cost solar technology which, they believed, would be more commercially viable. The new technology also had the benefit of being more efficient.
DOW Chemical has patented the new technology and it is this technology that is being licensed by Real Goods Solar, Inc. (NASDAQ:RGSE). Real Goods Solar, Inc. (NASDAQ:RGSE) has agreed to absorb all commercial aspects of the deal including supply chain management, marketing, sales, installation and warranty. It is believed that sales will commence in the first half of 2018.
Real Goods Solar, Inc. (NASDAQ:RGSE) shares, adjusted for dilution, have been battered over the past two years. In 2016 they were trading over $100 and spent much of 2016 with their shares valued at twice those levels. However, for the past few months the solar energy based company has struggled to keep its share value above $1 – typically the threshold for being listed on the NASDAQ Market.
The past year has seen RGSE stock hit a high of over $86, and a low of $0.60. Performance has, accordingly, been weak as the past year shareholders have seen, prior to today, RGSE stock lose over 98% of its value. Sales growth was impressive from 2012 through 2014 as the figure rose from $44 million to $70.8 million. Unfortunately, the company posted a disappointing $17.4 million for 2016.
As the market cap for Real Goods Solar, Inc. (NASDAQ:RGSE) is under $20 million, no firm yet follows the company and no share ratings are publicly available. But with this deal, that situation could change when revenues start hitting.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.