It seems like SunEdison Inc (NASDAQ:SUNE) simply cannot catch a break. SUNE stock plummeted a jaw-dropping 55% on Tuesday, March 29, as new evidence emerged that there is “substantial risk” of a SunEdison bankruptcy. (Source: “SunEdison at risk of bankruptcy, unit says; shares plummet 60 percent,” Reuters, March 29, 2016.)
The news comes on the heels of an investigation into the firm’s activities by the Securities and Exchange Commission (SEC). That, in turn, came on the heels of a lawsuit by billionaire investor David Tepper and a nine-month crash in SUNE stock.
Its share price fell below $1.00 for the first time ever, landing at $0.59 at the time of writing.
SunEdison’s core function is to build renewable energy power plants that can be sold off to one of its yieldco subsidiaries, either TerraForm Power Inc (NASDAQ:TERP) or TerraForm Global Inc (NASDAQ:GLBL). Those yieldcos simply own and operate the plant, passing through their income to shareholders.
Investors were enamored by the company for a while, but then a rapid expansion plan left them with a $12.0-billion debt load. Despite its bloated liabilities, SunEdison kept up its interest in acquiring Vivint Solar Inc, a rooftop solar company.
They spent months wading through legal and solvency concerns before the deal finally collapsed earlier in March 2016. It’s been an endless string of bad news for SunEdison.
The company even had to postpone its earnings announcement. When the extension was about to expire, SunEdison filed for another extension, pushing the deadline to March 30. Both its yieldcos have similarly postponed their earnings releases.
Shares of TerraForm Global fell 20.1% after the delay was announced on Tuesday. The company cited significant risks if SunEdison reneges on a deal in which TerraForm had already paid $231 million for solar energy projects in India.
“If SunEdison does not perform under these agreements, it could have a material adverse effect on TerraForm Global,” TerraForm Global said in a regulatory filing.
SUNE stock is currently trading at $0.56.