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Without John Walton and his generous funding, there might not be any First Solar--at least in its current form. The son and heir of Sam (Walton, that is) parlayed a chunk of his multibillions in Wal-Mart wealth, via his True North Partners VC firm, and made a sizeable bet in February 1999 on what was then a thin-film PV start-up known as Solar Cells Inc., or SCI. After sinking somewhere north of $150 million over the next six years to turn the renamed First Solar's cadmium-telluride technology into a volume manufacturable process and put the firm on the path to success, Walton met an untimely end in late June 2005 at the age of 58, when the plane he was piloting crashed in Jackson, WY.
Because of Walton's indispensable role in keeping the company alive--and no doubt some shrewd lawyering and deal-making--his estate and trusts hold more First Solar stock than any other entities, individual or institutional. But since April 30, that huge portfolio has been steadily shrinking.
Over the past three weeks, my inbox has been pinged almost every business day with yet-another SEC Form 4 Filings Alert, "Statement of changes in beneficial ownership of securities," from First Solar. On May 4, I opened the first one and noted that the Estate of John T. Walton had unloaded 200,000 shares of common stock on the last day of April at an total weighted average selling price (henceforth referred to as TWASP) of $178.96, or $35,792,000 in round figures. Since the Walton estate owned 19,003,857 shares before that trade, I didn't pay it much mind.
But then the next day, two Form 4s popped, one alerting the sale of another 200,000 shares by the estate on May 1, but another announcing the sale of 600,000 units by another arm of the Walton legacy--the JTW Trust No. 1 etc. The difference in this case is that 600K represented 15% of the previous holdings of that trust. It also broke the nine-figure mark in value; with a TWASP of $180.55, that transaction brought in more than $108 million and change.
From that point on, rarely a business day has gone by without at least one First Solar SEC Form 4 ping. Although no additional shares have been sold by the JTW Trust No. 1 (no relation to the Number One Ladies Detective Agency, btw), hundreds of thousands of shares once owned by Estate of John T. Walton have been liquidated. After the first few sessions, most of the daily selloffs--broken up into a half-dozen to a dozen or more transactions ranging from a few thousand shares to several tens of thousands--have been in 150,000-unit collective chunks. May 6 was the day with the highest TWASP--$198.44--while May 7 had the most individual transactions--18.
As of the most recent Form 4 announcement (and I doubt it will be the last), Walton's estate has sold 1,947,952 shares of common stock, representing 10.2% of its holdings when this selling spree began. The value of those shares--again, using the admittedly imprecise TWASPs as the multiplicative metric--is $365,508,094. Add in the amount garnered by the sale of the trust's shares and the total comes to $473,838,094.
If the selloff continues to the point where the Walton estate also unloads 15% of its stock from where its holdings stood at the end of April, some 2,850,578 shares will have been sold. With TWASPs possible in the $170-$190 range, selling off all that paper will add up to a total of well above $500 million for the estate alone and perhaps closer to $700 million for the trust and estate proceeds combined.
That's right in the monetary neighborhood of Q-Cells' entire placement of nearly 85 million REC shares--said to gross €530 million--earlier this month, although a bit short of First Solar's own 2007 revenues of nearly $1.25 billion.
