Gordon Johnson: Short Chinese Solar Stocks Ahead Of Potential Tariff Passage

Chinese solar stocks are about to “get crushed” by U.S. regulation, according to Axiom’s Gordon Johnson.

The International Trade Commission will decide Friday whether to impose a Section 201 tariff on imported solar panels, and things aren’t looking too good for foreign manufacturers.

“Our checks suggest the ITC decision on Friday will disappoint to the downside,” Johnson told Benzinga. “We have been pounding the table on shorting Chinese solar stocks.”

JinkoSolar Holding Co., Ltd. JKS, JA Solar Holdings Co., Ltd. (ADR) JASO and Trina Solar Limited (ADR) TSL are among the foreign solars trading on U.S. exchanges.

Some expect their impending injury to harm the greater American solar industry, prompting a decrease in demand as prices rise. Johnson anticipates stock drops particularly in SunPower Corporation SPWR, Vivint Solar Inc VSLR, Solaredge Technologies Inc SEDG and Sunrun Inc RUN.

However, First Solar, Inc. FSLR “goes a lot higher,” according to his analysis.

As late as May, Johnson had predicted an alternative outcome to the Section 201 investigation, asserting a 60-percent chance that the ITC decline the proposed tax.

Editor's note, Friday, Sept. 22: Solar Stocks Move As US Trade Commission Finds Harm To US Producers From Imports Of Solar Panels

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Analyst: First Solar’s Business Is Still ‘Fundamentally Flawed’