Shares of solar equipment maker SolarEdge Technologies Inc. (NASDAQ: SEDG) fell an incredible 21.5% in September, according to data provided by S&P Global Market Intelligence, after making some strategic moves investors didn't seem to like.
Early in the month, SolarEdge announced a partnership with Panasonic to make a new HIT S Series solar module, which will have SolarEdge power optimizers integrated at the factory. That's a big product announcement, but shares actually fell the most in the month right around the announcement. That could be because Panasonic is a fairly small player in solar power and it would have been more impressive to partner with a bigger company like Canadian Solar or JinkoSolar.
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SolarEdge also announced the acquisition of Kokam, a South Korean provider of lithium-ion batteries and energy storage solutions. The company will pay $88 million for 75% of the company's outstanding shares and then acquire the rest over time on the open market. This is a big bet for a company SolarEdge's size and may be seen as more risk than investors want to take on.
Neither of these moves should concern investors as much as the market is implying, but it will be important to watch how they impact products SolarEdge is rolling out. Integrating more with module manufacturers could be a good thing long term, but may result in slightly lower margins because manufacturers buy in bulk. Getting into energy storage in a meaningful way could also expand SolarEdge's market. It'll be a year or two before we see a meaningful impact of either move, but they'll be worth watching for investors.
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