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First Solar: why Sam's daughter-in-law is wealthiest Walton.

THE TERM "PATIENT MONEY" could have been invented for John T. Walton's investment in First Solar Inc. of Tempe, Ariz.

The second of Wal-Mart founder Sam Walton's four children bet millions--published estimates range from $150 million to $250 million between February 1999 and his death in June 2005--into a company originally called Solar Cells Inc. and its idea for cadmium telluride photovoltaic panels that convert sunlight into electricity.

When First Solar (Nasdaq:FSLR) made its initial public offering of stock in November 2006, Walton's heirs--primarily his widow, Christy--owned more than 80 percent of the outstanding stock. Even after the IPO, the Walton estate owned more than half of the company, a figure that has gradually been reduced to 35 percent as of April 15.

But 35 percent equals more than $4 billion when a company has market capitalization of $11.6 billion, as First Solar had last week. Those additional billions are the reason Christy Walton (and family), with estimated net worth of $22.5 billion, ranked No. 12 among the world's billionaires, as ranked by Forbes magazine in March, ahead of Sam Walton's surviving children, Jim (No. 15, $20.7 billion), Alice (No. 16, $20.6 billion) and Rob (No. 18, $19.8 billion).
First Solar Inc. Selected Financial Data

All dollars in thousands, except earnings per share

 1Q2010 FY2009 FY2008

Net Sales $567,961 $2,066,200 $1,246,301

Net Income (Loss) $172,345 $640,138 $348,330

Earnings Per Share $2.00 $7.67 $4.34

 FY2007 FY2006 FY2005

Net Sales $503,976 $134,974 $48,063

Net Income (Loss) $158,354 $3,974 ($6,462)

Earnings Per Share $2.12 $0.07 ($0.13)

Source: Securities & Exchange Commission


Among American billionaires, Christy Walton is No. 4, trailing only Microsoft's Bill Gates ($53 billion), Berkshire Hathaway's Warren Buffett ($47 billion) and Oracle's Larry Ellison ($28 billion).

After an IPO price of $20 a share, First Solar stock rocketed to more than $310 a share in May 2007. The stock lost more than two-thirds of its value in the crash of October and November 2008, flirted with $200 in mid-2009 and has bounced between $100 and $150 throughout 2010.

The company began commercial production of solar cells in 2002 and has rapidly increased its capacity, from 308 megawatts in 2007 to 1.3 gigawatts this year and a projected 2 gigawatts next year.

Part of First Solar's growth has been fueled by acquisitions: Turner Renewable Energy in 2007, solar project pipelines from OptiSolar in 2009, and Edison Mission Group and NextLight Renewable Power LLC this year.

First Solar brags that it broke the $l-per-watt cost of production barrier in 2008 and has since lowered its cost to produce a watt of solar production capacity to 81 cents. And earlier this month, the company announced that it had completed the "solar value chain" by starting to use roof-mounted solar cells to generate the electricity used to produce solar cells in its Frankfurt, Germany, plant.

By Gwen Moritz

GMoritz@ABPG.com
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Author:Moritz, Gwen
Publication:Arkansas Business
Date:Jul 26, 2010
Words:502
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