American Superconductor Plunges Following Acquisition; Rebound Expected
Tate Dwinnell submits: Shares of American Superconductor (AMSC) plunged to another 52-week low yesterday morning with heavy volume after the company announced a $265 million acquisition of Finnish company The Switch and subsequently lowered guidance in the short term. CEO Greg Yurek calling 2011 a “transition year” likely didn’t help the stock either. Let’s start with the acquisition news. Sure, in the short term the financials take a hit, but it appears AMSC acquired a key technology which will be a growth driver for it in the future. The Switch manufactures permanent magnet generators, which eliminate the need for gearboxes and increase efficiency by nearly 10% over traditional wind turbines in a 2MW turbine. According to AMSC, The Switch's products may also prove to be an important ingredient in offshore wind turbines, because they won’t rust out over time as traditional gearboxes do. The company believes the acquisition will help it achieve itsComplete Story »
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