Vestas year-end orders race continues

According Bloomberg’s report published yesterday, short interest in Vestas Wind Systems A/S (OMX: VWS) as compiled by Data Explorers Inc, has reached 17.2% as of December 26th. This is the highest level to date as investors continue to bet heavily on order intake guidance miss, an ongoing story since the second quarter of the year.

Vestas was again down for much of the day today but gained that back on a last-minute announcement of a major deal from Brazil. CPFL Renováveis is ordering 127 V100-2.0 MW Vestas wind turbines for Campos dos Ventos and São Benedito projects. This order totals 254 MW and includes a ten-year service contract. Delivery is expected in 2013-2014.

Considering how likely the investors view a guidance miss, if Vestas were to claw its way atop the lower bound of its guidance range at 7000 MW of orders received, a considerable short squeeze could be in order. On the other hand despite the heavy speculative betting on a failure, seeing as though how adamant Vestas’ leadership has been in saying they will meet the goal, to have to retract on that stance in the last trading day of the year or after the fact would result in a massive loss of investor trust and thus still represents meaningful downside potential. Even if such numbers and dates may sometimes seem to take too much importance, confidence in company management and its communications shows directly in the risk pricing of the stock.

Vestas has already lost around 2/3th of its market value in 2011. However, that is not terribly outstanding number in the industry as many peers have performed nearly equally bad. Macro environment and tight bank credit conditions for investments going forward are major challenges. Today’s order brings announced orders for the year close to 6000 MW, with unannounced Q4 orders not included. Vestas’ spokesman Peter Kruse told Bloomberg by phone yesterday, that the company still expects to meet its guidance.