First Solar: Why Sam's Daughter-in-Law Is Wealthiest Walton

by Gwen Moritz  on Monday, Jul. 26, 2010 12:00 am  

The term "patient money" could have been invented for John T. Walton's investment in First Solar Inc. of Tempe, Ariz.

The second of Wal-Mart founder Sam Walton's four children bet millions - published estimates range from $150 million to $250 million between February 1999 and his death in June 2005 - into a company originally called Solar Cells Inc. and its idea for cadmium telluride photovoltaic panels that convert sunlight into electricity.

When First Solar (Nasdaq:%%FSLR%%) made its initial public offering of stock in November 2006, Walton's heirs - primarily his widow, Christy - owned more than 80 percent of the outstanding stock. Even after the IPO, the Walton estate owned more than half of the company, a figure that has gradually been reduced to 35 percent as of April 15.

But 35 percent equals more than $4 billion when a company has market capitalization of $11.6 billion, as First Solar had last week. Those additional billions are the reason Christy Walton (and family), with estimated net worth of $22.5 billion, ranked No. 12 among the world's billionaires, as ranked by Forbes magazine in March, ahead of Sam Walton's surviving children, Jim (No. 15, $20.7 billion), Alice (No. 16, $20.6 billion) and Rob (No. 18, $19.8 billion).

Among American billionaires, Christy Walton is No. 4, trailing only Microsoft's Bill Gates ($53 billion), Berkshire Hathaway's Warren Buffett ($47 billion) and Oracle's Larry Ellison ($28 billion).

After an IPO price of $20 a share, First Solar stock rocketed to more than $310 a share in May 2007. The stock lost more than two-thirds of its value in the crash of October and November 2008, flirted with $200 in mid-2009 and has bounced between $100 and $150 throughout 2010.

The company began commercial production of solar cells in 2002 and has rapidly increased its capacity, from 308 megawatts in 2007 to 1.3 gigawatts this year and a projected 2 gigawatts next year.

Part of First Solar's growth has been fueled by acquisitions: Turner Renewable Energy in 2007, solar project pipelines from OptiSolar in 2009, and Edison Mission Group and NextLight Renewable Power LLC this year.

First Solar brags that it broke the $1-per-watt cost of production barrier in 2008 and has since lowered its cost to produce a watt of solar production capacity to 81 cents. And earlier this month, the company announced that it had completed the "solar value chain" by starting to use roof-mounted solar cells to generate the electricity used to produce solar cells in its Frankfurt, Germany, plant.

Robert J. Gillette,a  former executive at Honeywell International, succeeded Michael Ahearn as CEO of First Solar on Oct. 1. Ahearn remains chairman of the board.

 

 

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