Yet again Vestas have promised more than they can deliver and the market has promptly punished the company with a massive fall in shareprice. It would seem that the management of Vestas with Ditlev Engel in front can’t get it right or as a minimum they are just too optimistic for their own good.
But why is it so hard to predict how Vestas performs even for the management of the company? One guess could be that the market for wind turbines is extremely versatile. From 2006 to 2008 there seemed to be a fairly stable period with a slow but steady increase in order intake then in 2009 the market seemed to bottom out as the talks about CO2 quotas went on and then in 2010 Vestas got a few but very big orders.
One of the reasons why Vestas is so vulnerary is that they in contrast to other plays like GE and Siemens only have one product line. Other companies have a diverse portfolio that they are able to market so if they lose something on one product line they can make up some of the looses in another. This is also apparent in their stock have experienced a close to steady positive development for the past year.
I would not write of Vestas for now but they do need to get their communication to the market under control or at least be more open about their prospects. Investors get jumpy when they are confronted with information that they did not expect, both in a positive and negative sense. In a very volatile market as the wind energy market is, there is no substitute for timely valid and real hard facts instead of dreams and hopes for the future. If the CEO is to remain at Vestas he needs to provide the market with more than his dreams.