It wasn't too long ago that I wrote off DSTI as a hopeless wreck. Despite the promise of an improved CIGS process the stock had made the unforgivable sin of becoming a penny stock. Everyone knows the statistics on any given penny stock, so when DayStar had gotten down into the 40 cent region I thought it was just a matter of time.
The problem is, despite the stock's rally up to $1.20 it seems that the company is still in the same doomed situation. The would-be solar panel producer has next to no cash and continually have to get special financing in order to keep their doors open.
There had been the question of whether DSTI would be able to stay listed on the NASDAQ with their penny status, but the Exchange has backed off of delisting the issue with the recent rally. But there is no guarantee in the future if DayStar becomes a penny stock again then they'll be back in trouble with the NASDAQ listing requirements.
Here is the problem. Every single quarter is nothing but a multi-million dollar loss. The most recent was a $6 million loss. What is the answer here? Even if the product has value it doesn't really matter at this point. The time is running out unless the company can start delivering meaningful quantities of panels, and do so consistently.
DayStar had a great idea but took too long to establish themselves. In 2008 they liked to boast about their new Silicon Valley high tech production facility. Who cares about that? Not investors. The company has been more of a plan and concept rather than a functional firm that sells product.
If this company wants to survive they will have to have at least one quarter with a profit. If you remember a firm like Amazon, they had years of bleeding in the red. But the difference is they had growing sales, as in rapidly growing. This also had a growing customer base, a growing household name and a lot of financing behind them. DSTI has none of those strengths. Outside of the solar stock community DayStar is simply unknown. Also, back when Amazon was struggling there was much more access to credit and ton of venture capital. All of that has changed today.
DSTI has an uphill fight on its hands. The other major solar panel producers are working hard at getting all the contracts. The ability to borrow without end is not a good idea in this market. Yes, DayStar did manage to escape from the penny stock realm. But they'll have to do a lot more than that if they are going to survive.
