Solyndra Schadenfreude As Goldman Sachs Played Key Role

Tyler Durden's picture

While we are not completely shy of saying we-told-you-so, in the case of the players in Solyndra's fantastic rise and fall, we are more than happy to. Back in September we highlighted Goldman Sachs' key role in the financing rounds of the now bankrupt solar company and this evening MarketWatch (and DowJones VentureWire) delves deeper and highlights how the squid has largely stayed out of the headlines (what's the opposite of lime-light?) in this case despite its seemingly critical assistance and support from inception to pre-destruction.

MarketWatch: How Goldman played key role in Solyndra's rise

Goldman Sachs Group Inc. (NYSE:GS) , which Solyndra hired in 2008, helped propel the solar panel maker from Silicon Valley start-up to White House showcase. It solicited investors for the company with rosy valuation projections and helped Solyndra win a $535 million Department of Energy loan guarantee. And it positioned itself to earn underwriting fees if the company held an initial public offering.


The banking giant's name has come up in the course of the Congressional investigation that has followed Solyndra's spectacular downfall, but it's not the focus. Even so, the extent of Goldman's role helps explain how Solyndra catapulted from unknown start-up to secure more than $1 billion in private capital. That private backing was "absolutely" a factor in the government's decision to make Solyndra the first beneficiary of a DOE loan-guarantee program, said department spokesman Damien LaVera.




Goldman spokesman Michael Duvally declined to comment on most aspects of Goldman's work for Solyndra, as well as whether the company has been contacted as part of the federal investigation.


Investment banks often help promising young companies raise capital, deal with the government and prepare to go public. Goldman's role in Solyndra followed that standard script, but its client turned out to be anything but typical, as Solyndra's bankruptcy filing in September triggered a political tempest.




By the time Goldman got involved in 2008, Solyndra had already raised at least $300 million in equity and $93.5 million in debt, according to regulatory filings and research firm Dow Jones VentureSource.


That summer, as oil prices were at a record high, fueling interest in renewable energy, Goldman began soliciting investors for another round.




A private-placement memorandum viewed by VentureWire, which was shopped around in July 2008 by Goldman to prospective investors, stated Solyndra had long-term sales contracts that "allow for approximately $1 billion of sales from 2008 to 2012."




Goldman's involvement in Solyndra, and its lofty valuation projections, lent credibility to the company and helped rouse investor interest.




Goldman considered putting in its own money, but it decided to wait, because Solyndra had just completed its latest financing round, a person familiar with the matter said.


By early 2009, Goldman was Solyndra's exclusive financial adviser as it helped the company negotiate terms of its $535 million government loan guarantee. Emails from January 2009 show Goldman dealing directly with the Treasury Department unit that made the loan guaranteed by the Energy Department.


By that time, the market was already turning against Solyndra, because the price of a key material used by its Chinese competitors was falling sharply. That was clear to a Goldman Sachs research analyst, Michael Molnar, who in October 2008 warned clients that the risk of oversupply in the market would "soon become a reality" as subsidies shrink and financing tightens.


One of Solyndra's competitors, Nanosolar Inc., sent an email to an energy department official in February 2009, questioning "whether the DOE loan guarantee program is suitable as a 'bail-out' program for failing private manufacturers."




Goldman continued with plans to take Solyndra public. Following the closing of the federal loan in September 2009, Solyndra filed in December 2009 to go public and raise $300 million. Goldman and Morgan Stanley were the lead underwriters and stood to make millions of dollars in banking fees.


In March 2010, Solyndra's auditor raised doubts about the company's prospects. Two months later, Solyndra canceled its IPO, citing market conditions, and soon was in danger of defaulting on the DOE loan.


In an effort to keep Solyndra afloat, Goldman began canvassing for investors. In October 2010, Goldman representatives were scheduled to meet with the DOE to discuss the potential for bringing in more private capital from new investors, according to emails published last week as part of the Congressional investigation.




By December 2010, Solyndra had run so short of cash that it violated terms of its loan agreement. A group of existing investors, including Argonaut, came to the rescue in February...


With no options in sight, the company pulled the plug in September, filing for bankruptcy and laying off about 1,100 employees. Solyndra's $1 billion sales projection in the Goldman-advised 2008 memo proved to be overly optimistic.




All told, Solyndra raised $1.34 billion in private capital--including $632 million in equity and $300 million in debt with Goldman's help, according to filings and VentureSource data.


Solyndra is currently trying to unload its assets to the highest bidder in the wake of its bankruptcy filing. This time, it won't get any help from Goldman: Goldman's Duvally said the bank and Solyndra are no longer involved with each other.

As we said before, anywhere you look, Goldman has been there and left its slimy, inky mark.

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Mr Lennon Hendrix's picture

Goldman does a great job at murdering markets, especially those that pose a threat to the status quo.

The banking cartel are also the very same men who run the Military Industrial Complex and Major Oil corpprations.  They want the Old Order to go on as long as it has to.  They do have the New Order set in place, but they want to milk the old cow for every drop.

Solar is the only industry that can match oil in the long run.  Coal has a horrible EROEI and is filthy (there is no such thing as clean coal) and Natural gas must be turned into a liquid in order to ship across oceans, and this is a very dangerous process.  Wind has not improved its technology for thousands of years.  The world is reliant on solar tech improving, or else peak oil will swallow the status quo whole.

Yet the oilgarchs do not care what happens to the people they view as peasants in the long run.  They just want to return to be Kings and Queens.  They are psychopaths, and have no understanding about the world that they are driving humanity into.  So they tank the whole solar industry in hopes that people will not finance it and pay for oil with their lives.

Then there is the finance side, who love to take an industry down just to then buy it up.  Look for big money to run into solar right before oil spikes for the last time.  Should be any month now.  Look for solar to be the next big thing after everyone has shorted it only because one company went bankrupt.

I'd put my money on solar energy....I hope we don't have to wait for oil and coal to run out to tackle that.

-Thomas Edison, speaking to Henry Ford and Harvey Firestone

dogismyth's picture

Excellent comment!  I think you are right on almost all counts.  But don't expect many to comment since they are chasing their tails.

The fun is just about to begin for the elite.  And maybe the reasoning behind the Senate wanting indefinite detention of terrorists (domestic and foreign).

The Occupy West Coast Ports is what is missing from everyones equation.  Amazing that this is hardly discussed here on ZH.  What does that say?!

miker's picture

Anything for a buck.

CClarity's picture

That slimy squid has become careless.  Leaving its detrious everywhere.  

disabledvet's picture

more like a fat steaming pile of dookie. one day that dog 'll be house broken!

URZIZMINE's picture

They got thier cut. Pluck you taxpayer.

sony1's picture

I can't believe they got the loans, the gov didn't do their due diligence very well. It was widely known in the industry at the time their silly "tube"-technology was a failure.

rtalcott's picture

Very true...i was expecting them to go TU and then they managed to get that loan which kept them going for another was a no brainer that they would fail which also tells you how smart Palo Alto VC money is.

GiantVampireSquid vs OWS UFC 2012's picture

Doesn't make sense to bailout a green energy factory when you can bailout a parasitic bank instead.

death_to_fed_tyranny's picture


Atomizer's picture

You have to wonder if Mark Zuckerberg is reading this and staring at the skid mark he left in his Fruit of the Room undies.

Did any of you ever read the Solyndra S-1 filing? Enjoy.

dick cheneys ghost's picture

bankers dont let bankers drive drunk

Rainman's picture

The Squid has a blood funnel inserted into every segment of the .gov host. No surprise they were in there for a solar dip.

midgetrannyporn's picture

Can an evil squid holding company get a bonus up in heya?

Kayman's picture

Bankers pay Skankers to dive drunk

azzhatter's picture

Usually Blankfein sucks somebodies cock to keep this stuff quiet. Lloyd getting careless?

Obadiah's picture

We need an area where people can talk specific strategies.
strategies for those by investment level, expertise and time needed to make a said strategy to work.

Satandammit I am tired of reading gloom and doom over and over!!!! Give me something I can do now today to succeed in this shitstorm we all know is commin, besides physical bitchez!!

What effin good does it do me to read how I am being and will be raped over and over and over. I get it!!!!!! NOW WHAT????

Come on give me a strategies please!!!

Come on Tyler make it happen

Bring it!


shayne from Nebraska

Hansel's picture

Yeah Tyler!  I want to have more money than everyone else too so tell me what to invest in so I can be more rich than all you other people.  Now, dammit!

Obadiah's picture

Capital G Jimmy, Capital G and your right thats the first step

Wixard's picture

Forget my post, buy gold and be safe 

nmewn's picture

Shocking, they went green to get the

Meanwhile the CCX is still quite bankrupt.

Atomizer's picture

I was shipping 2-3 Intermodal containers a week. Solyndra arranged via Pacer Stacktrain.

Grandpa Warren as a Child

nmewn's picture

LOL!!!...good stuff ;-)

Wakanda's picture

The opposite of lime light is LiMe DaRK?

Lemon dark?

Citrus shadow?

I know...  LeMoN HeaVy

monopoly's picture

Disgusting. What a rip off.

Piranhanoia's picture

the answer is offstage, waiting in the wings, or if there is a catwalk, it might mean pulling the actor's strings.

Temporalist's picture

I don't see what the big deal is.  Goldman marks its territory like most predators; by pissing on everything.  Since they own everything it's not that surprising.

willien1derland's picture

Goldman Sachs...interesting legacy notwithstanding the housing debacle including deals like Abacus & Timberwolf, perpetrating fraud by hiding Greek & other periphery EU Debt to allow countries to enter under the Euro Zone under the Maastricht treaty guidelines...using its connections to have Hank Paulson allow GS to magically become a Bank Holding Company over that magical weekend in September 2008 & now Solyndra...How much longer should the US allow this Financial Terrorist organizaton to wreak havoc on the US as well as the rest of the world...The US should use all its resources including it military power to rid our nation of this threat...Hey Levin & McCain - justify why the RICO act should not be invoked in order to eliminate this terrorist organization? Crime after Crime is perpetrated & overlooked - Time that rubber meets the road - if the US truly wants to wage a war on terror eliminating Goldman Sachs would be a step in the right direction

Use of Weapons's picture

Odds 10-1 they got out with good deal. Any takers? Thought not.


Are we shocked anymore? GS does deals: and the deal is - whatever happens, GS makes money. No matter the cost.

willien1derland's picture

Do not disagree with your assessment UoW - But here is an interesting proposition - to the victor the spoils - allow the U.S. military to dismantle Goldman & keep the proceeds of the endeavor - because at the current rate of Goldman's criminal syndicate's  proliferation - I include their depraved alumni in this context as well - it would be the single most effective use of military resources in the last 15 years! Just to watch Blankfein's paws ripped from the Fed Discount window would be a picture that would define a turning point of the present financial debacle!

Coldfire's picture

Schadenfreude? No. It's freude all the way, baby.

hayesy316's picture

"(what's the opposite of lime-light?)"


fuzed's picture

I would go with dark, rat infested pools,  but...

navy62802's picture

So basically, nothing has changed. BFS - Big fucking surprise. Eventually, GS will meet its demise at its own hands. All it takes is time.

Father Lucifer's picture

Soon we will be buying Chinese solar energy components at Home Depot and Lowes.

nowhereman's picture

Is there anything that these scum are not involved in?

We don't need to worry about Iran, nuke goldman sachs the true enemy of mankind and the worlds largest terrorist organization.

non_anon's picture

whatever goldman touches, turns to shit, for taxpayers, anyway

americanspirit's picture

Left its mark - like a pile of dogshit on a white carpet. No way to get rid of the stain. Even bleach leaves negative space. And the smell - it lingers long after the turds are disposed of. Goldman Shits. A mark of dis-stink-shun.

Tom Green Swedish's picture

Goldman Sachs is currently long the following: Madoff style investing, cocaine and hookers and being on their 1 percenter high horse.!/GSElevator

El Gordo's picture

The squid is involved in a crooked government funded deal?  Now there's a surprise.

Scalaris's picture

Goldman Sachs' involvement into any kind of shady deal doesn't even constitute a suprise anymore. Its reputation has been so firmly cemented into every lore and conspirational theory, that future historians are going to be wondering how the hell a corporation managed to control the world (along with the rest "olden" banking houses of course).

Grand Supercycle's picture

SP500 monthly chart remains bearish and USDX weekly remains bullish so it’s only a matter of time until the market makes its move.