Later this week, shares of, what is now a penny stock, Satcon Technology Corp. (Nasdaq: SATC) are going to become 8 times more expensive after the split. SATC stock price is currently set to start the week at 0.205 after gaining 4.06% on Friday, -21.60% below the 50-day, -52.14% the 200-day, and -90.85% below the 52-week high of $2.24. In order to stay listed on the Nasdaq, Satcon Board of Directors approved a 1-for-8 reverse stock split which will be effective at the opening of trading on July 19, 2012.
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SATC Stock Chart – One Year
The reverse stock split will cause for SATC to trade as “SATCD” for 20 trading days, and will reduce the outstanding number of shares from approximately 144.2 million to roughly 18.0 million while the Company plans to, concurrent with the reverse stock split, reduce the number of authorized shares to 37.5 million.
This is fantastic news since dilution will be extremely limited allowing Satcon to begin realizing a PPS appreciation after receiving a $2 million grant from the California Energy Commission to develop and demonstrate methods to reduce the effects of renewable power intermittency. The Company was selected for one of California’s largest solar PV power plants, 52.5 megawatts, as well as having recently been named the #1 large-scale solar inverter supplier in North America for the second straight year.
About SATC Stock
When the Company filed its 10-Q for the period ended March 31, 2012, Satcon reported cash of $15,916,614, current liabilities of $103,954,866 with an additional $27,194,160 in other long-term liabilities. For revenues, Satcon reported $24,288,514 for the three months ended compared to $62,004,937 for the same period in 2011. Due to extremely high costs, gross margin for Q1, 2012 was simply $160,696 compared to $14,872,412 in Q1, 2011.
To check the SEC filings for Satcon, click here.
Bottom Line: Solar penny stocks could be making a comeback for those who are “extemely” long in positions like Satcon Technology Corp. with SATC stock. Will you get small gains here and there, sure, but this is the kind of penny stock that you really need to have the patience and vision similar to Warren Buffett with his venture into First Solar Corp., FSLR.
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