BUFFALO, N.Y. -- SolarCity stock made a partial recovery Wednesday after dropping more than 20 percent the day before.
"We call that a 'Dead Cat Bounce' because it was down so hard yesterday, no matter what, it's probably going to bounce a little today," wealth manager Jay Blanchard of The Financial Guys said.
In fact, the stock's dropped about 70 percent in the past year. Blanchard attributed the latest plunge to a quarterly report released Monday. The company had higher than expected net losses and decreased its projections for solar panel installations this year.
"If you came in here and you said, 'Jay I want to buy this stock.' I'd make you sign a disclaimer saying I told you not to," he said.
Blanchard said this isn't good news for New York state, which has invested hundreds of millions of dollars to build a manufacturing hub where SolarCity has promised to invest $5 billion.
"What if things get really bad for this company and it starts to go under?" he asked. "That leaves the government with some choices. Are they going to float the company to get the thing back on good legs or are they just going to let it go and watch their investment, their subsidies, their grants go down the drain?"
Buffalo Mayor Byron Brown said neither he nor the state has concerns about the long-term viability of the company.
"The projections of jobs are still in place," said Brown, D-Buffalo. "We're still expecting SolarCity to produce 3,000 jobs for the residents of Buffalo and Western New York. That's good news for this community. I say let Buffalo be the place to help SolarCity to have its stock on the rise once that facility is built out."
While the company did announce a three- to six-month delay earlier this year, local leaders said the project has otherwise remained on schedule.
"Now is the time in which SolarCity would be putting in some of its equipment but I know the equipment's been ordered. It's being produced at the manufacturing facility in Germany. It's a little delayed but I don't see a problem with SolarCity getting off the ground here," said County Executive Mark Poloncarz, D-Erie County.
Blanchard said the company does have a few good things going for it, not the least of which is its chairman Elon Musk, a well-known and respected entrepreneur, but he said SolarCity always has been and remains a gamble for New York.
A spokesperson for SolarCity said the company's outlook in Buffalo hasn't changed and it's actually looking forward to working with New York to accelerate the production schedule. The company does expect the facility’s production to reduce our installed costs after it is fully ramped up.