LDK Solar Saga Rolls On

Originally Published In the News October 9, 2007 9:20 AM

LDK Solar’s (LDK-NYSE) management is taking great pains to not end up like UT Starcom (UTSI-NYSE) a few years ago, and is fighting back with increased guidance. If you believe what they say it should mean that it exceeded its original plan and shipped approximately 75 MW of wafers in the third fiscal quarter ended September 30, 2007. LDK management stands by its internal review of the inventory and does not believe there are any material inconsistencies with what LDK has disclosed in its financial statements. “As we previously indicated, we believe that there is no merit in the allegations made about our inventory accounting practices, our business operations are normal and we continue making shipments to fulfill our customers’ orders,” stated Xiaofeng Peng, Chairman and CEO. “We remain confident that we have the appropriate financial controls and procedures in place for inventory reporting, and look forward to putting this unfortunate matter behind us.” LDK raised guidance for Q3 (Sep), sees Q3 (Sep) revs of $140-150 mln vs. $121.07 mln Reuters Estimates consensus, prior guidance $115-125 mln. Briefing

Investors willing to take them a face value should bid the stock up this morning, and if all is indeed well the stock’s markdown was overdone. Dicey stuff here, and a reminder that shenanigans might be one of China’s biggest exports over the next few years. No position for us, but it is entertaining to watch it unfold. No Position

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