The LDK Saga Continues

Well this is 1 way to defend your stock. LDK Solar (LDK) on the offensive.

LDK Solar Comments on Recent Events AND Increases Q3 Guidance

• XINYU CITY, China and SUNNYVALE, Calif., Oct. 9 /PRNewswire-FirstCall/ -- LDK Solar Co., Ltd. (NYSE: LDK), a leading manufacturer of multicrystalline solar wafers, today commented on recent inaccuracies and misperceptions in the market and the media.
• On October 4, 2007, LDK Solar issued a statement refuting certain allegations made by a former employee who was terminated for cause regarding its inventory reporting after LDK's management conducted an internal investigation and physical inventory counts and found no material discrepancies as compared to LDK's published financial statements. In addition, LDK's Audit Committee is in the process of conducting a review of the inventory and will disclose its findings to the public in due course. LDK's management team continues to believe that the allegations made by a disgruntled, former employee have no merit.
• LDK Solar would like to clarify certain misperceptions that have recently been circulated.

• LDK management stands by its internal review of the inventory and does
      not believe there are any material inconsistencies with what LDK has
      disclosed in its financial statements.

• LDK uses both virgin and recyclable polysilicon for ingot production.
      LDK's ability to use recycled silicon in the manufacturing process is a
      key strength of the company in its efforts to enhance its cost
      structure.  LDK consistently accounts for its various grades of
      recycled polysilicon used in its production process.

• LDK's inventory is subject to periodic review and examination by both
      internal and external working parties, including LDK's independent
      auditors, in connection with the preparation by LDK of its quarterly
      financial statements and, to date, they have not found any material
      inconsistencies.

• LDK's OEM business consistently uses polysilicon feedstock consigned by
      its customers; such feedstock does not mix with LDK's own inventory.
      There have not been any customers sending on-site quality inspectors to
      LDK Solar plants to question the quality of the shipped wafers.

• LDK has continued its wafer production, shipment to customers and
      capacity expansion as planned.

• Based on preliminary management reports, LDK exceeded its original plan and shipped approximately 75 MW of wafers in the third fiscal quarter ended September 30, 2007. As a result, LDK hereby updates its Q307 revenue guidance from $115 to $125 million to $140 to $150 million.
• "As we previously indicated, we believe that there is no merit in the allegations made about our inventory accounting practices, our business operations are normal and we continue making shipments to fulfill our customers' orders," stated Xiaofeng Peng, Chairman and CEO. "We remain confident that we have the appropriate financial controls and procedures in place for inventory reporting, and look forward to putting this unfortunate matter behind us."

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Takeaway: Again, I have to say this company has done everything it can do. It issued a defense on Friday, it issued a defense yesterday, and today it really issued a defense and raised guidance. Last, will come the 3rd party auditor report and if it 'bears fruit' this will be a mother of all buying opportunities. What is interesting is another company in the supply chain, JA Solar (JASO) back a few months ago, actually had product refused by a customer due to quality issues, yet that company was not brought out in the news media and flogged relentlessly. Yet LDK Solar (LDK) from all news accounts I have been able to find has yet to have any product refused by customers yet gets the Barron's hatchet. Why not JA Solar (JASO) as the target of a piece of a Chinese company whose product is so poor that even in an age where supply chain is so strained that a company would refuse to take their product back?

Anyhow, this is a good step, but we still need that independent 3rd party auditor to give the final blessing.

Long LDK Solar in fund and in personal account