First Solar's board of directors ousted the solar company's chief executive, Rob Gillette, replacing him on an interim basis with Chairman Mike Ahearn while it searches for a permanent replacement.
Shares in the world's most valuable solar company plummeted more than 24 percent to $43.71--its lowest level since March of 2007--following the unexpected Tuesday announcement.
"It's an absolute and total surprise," said Mark Bachman, an analyst with Avian Securities LLC.
The U.S. solar company said in a brief statement that its board of directors has asked Ahearn to serve as temporary CEO while a search committee looks for Gillette's replacement. It did not give a reason for Gillette's departure.
Gillette joined First Solar as CEO on October 1, 2009, from Honeywell Aerospace, where he was CEO. He replaced Ahearn in the company's top job at that time.
He oversaw a loss in market value for First Solar of more than 65 percent during his tenure, as a glut of solar panels squeezed prices and margins for the entire industry.
First Solar had invited investors and analysts to a meet-and-greet cocktail hour with the company's management in New York on November 15, according to Bachman. The invitation listed nine executives from the company who would be there, but did not include Gillette.
"Maybe that should have been a sign," he said.
As recently as last Wednesday, however, Gillette participated in a First Solar press conference at a major solar industry trade show in Dallas.
Prices for the photovoltaic panels that turn sunlight into electricity have tumbled more than 30 percent this year, pressured by a glut as key markets in Europe trimmed subsidies for renewable energy.
First Solar, which is based in Tempe, Arizona, has long been considered a standout in the industry because its cadmium telluride panels are cheaper to make than the silicon-based panels that dominate the market.
Recently, however, some analysts have raised questions about the company's long-term outlook in the face of declining prices on competing products that are more efficient at turning sunlight into electricity.
"We believe investors are increasingly concerned about the growth story for First Solar," J.P. Morgan analyst Christopher Blansett wrote in a note to clients on Monday. "How can it continue to achieve its current level of profitability in the face of continued price declines for silicon wafer modules, declining national level subsidies, quasi-state sponsored Chinese competitors, and subdued wholesale electricity pricing, which is being enabled by cheap natural gas?"
Blansett also cut his price target on First Solar shares to $50 from $105.