Will Short Sellers Hang On To First Solar?

• And earnings beat led to an upgrade for this leading solar firm.
• Short sellers have bet heavily against the stock.
• Its share price rose handily in the first two weeks of April.

On Wednesday, First Solar, Inc. FSLR had one of its best days since late 2015, with shares up more than 19 percent after the company posted better-than-expected first-quarter results and raised its guidance after three analyst upgrades between the last week of April and Wednesday.

Short sellers may find some comfort in Wednesday's upgrade from Axiom Capital, though, as the analyst only raised its rating to Hold and said the positive results were due to a large project sale and not to operational excellence.

Number Of Shares Short, In Review

Between the March 31 and April 13 settlement dates, this Arizona-based solar energy solutions provider saw the number of its shares short rise a little more than 1 percent to more than 17.83 million. But that represents 23.3 percent of the total float, and it was more than triple the level of short interest at the same time last year. At the average daily trading volume as of mid-April, it would take more than four days to cover all short positions.

Shares saw a bump during the short interest period on rumors of a possible value-added carbon tax. But First Solar's share price ended the two-week period only around 1 percent higher, while the Nasdaq saw a retreat of almost 2 percent in that time. Even before Wednesday's rally, the stock had risen more than 10 percent since the settlement date. The consensus recommendation of analysts polled by Thomson/First Call remains to hold the shares.

In Thursday's pre-market session, shares were seen up 2.89 percent at $24.89. The stock closed out Wednesday up 11.84 percent at $33.91.