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SunEdison ‘s ( SUNE ) inferno continued Wednesday, a day after rumors flared that it might be in debtor-in-possession talks with creditors — often seen as a precursor to a Chapter 11 bankruptcy filing. In the stock market today , SunEdison stock plunged 15% to 1.27 and near its all-time low of 1.21 touched on Feb. 26. Shares have crashed 96% since July 20, when SunEd announced a bid to acquire installer Vivint Solar ( VSLR ). Shares of Vivint Solar and of SunEd yield company TerraForm Power ( TERP ) fell 11% and 3.8%, respectively. The conflagration also charred SolarCity ( SCTY ), SunPower ( SPWR ) and First Solar ( FSLR ) stocks, which tumbled 10%, 7.6% and 4.3%, respectively. More broadly, IBD’s 21-company Energy-Solar industry group felt the burn, falling a collective 4.3%, its biggest single-day drop since Feb. 11. Axiom Securities downgraded SunEdison stock to a sell rating and lowered its price target to 22 cents from 39 cents. Intraday, Stifel Nicolaus suspended its rating on SunEdison stock. On Tuesday, SunEdison executives declined to comment on “market rumors and speculation.” SunEd is reportedly negotiating with holders of $725 million in second-lien loans, according to a report by Debtwire, cited by Reuters. SunEdison’s woes tie back to its plan to acquire Vivint Solar in July, S&P Global Market Intelligence analyst Angelo Zino told IBD earlier this month, after Vivint scrapped its sale to SunEd on financial worries. At the time, SunEd’s banks were reportedly hedging on the deal. SunEdison and TerraForm Power had just delayed their 10-K filings amid an ongoing investigation into SunEd’s liquidity stance. Now, TerraForm Power faces possible delisting after falling out of Nasdaq compliance, as well as a potential slew of investor class action lawsuits . Four law firms are investigating whether TerraForm Power violated securities laws. Scalper1 News
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