Tag Archives: nasdaq

Chart Of The Week – 2008 Or 2011?

By Joseph Y. Calhoun Credit spreads are a big input to our investment process. It was the widening of spreads that convinced us to reduce our equity allocation before the volatility of last year. But active asset allocation requires that you get two consecutive decisions correct and that isn’t an easy task. Right now, for instance, we are watching spreads intently trying to figure out whether the all clear has been sounded. Spreads have narrowed considerably over the last five weeks, and if they continue to do so, we will, in keeping with our process, be forced to raise our risk budget. When we did our monthly Global Asset Allocation review 11 days ago, the trend was still toward widening and the decision was obvious but spreads have continued to narrow. So, the big question facing us and all the other tactical allocators is this: Is it 2008 or 2011? If it’s the former, we have just been given a wonderful opportunity to get more defensive. If it is the latter, we need to figure out how to raise our risk allocation. Click to enlarge So which is it?

SunEdison Stock Torched On Creditor-Negotiation Rumors

SunEdison ( SUNE ) stock was torched Tuesday on reports that it’s in talks with creditors over $725 million in second-lien loans, two weeks after the Vivint Solar ( VSLR ) acquisition went up in smoke. In afternoon trading on the stock market today , SunEdison stock crashed 19% and was trading below 2 on the firm’s second biggest single-day plunge this month. Meanwhile, Vivint Solar stock buoyed 3% early after securing $200 million in funding for rooftop project, but dropped sharply to just a fractional gain in the afternoon. SunEdison is engaged in debtor-in-possession negotiations , according to sources noted in a Debtwire report cited by Reuters. SunEdison and yield company TerraForm Power ( TERP ) have twice delayed filing their 10-K annual reports amid a SunEd liquidity investigation. SunEdison representatives declined to comment to IBD on “market rumors and speculation.” Current and former executives alleged in late 2015 that SunEdison misrepresented its liquidity stance. No material mistakes have been found in the audit thus far, SunEd said last week. But the audit is holding up both 10-K filings. Delaying its 10-K put TerraForm Power out of Nasdaq compliance . It formally has until May 16 to submit the form or file a plan to regain compliance, although the SunEd yieldco could get until Sept. 12 to become compliant or face delisting. And, at least four law firms are investigating whether TerraForm Power violated securities laws related to the  fraud and insider trading sections of the Securities and Exchange Act of 1934. TerraForm Power stock sank about 6% in afternoon trading Tuesday alongside its parent. Vivint Solar credited its $200 million term facility closure to its freedom “from the constraints of the terminated SunEdison merger agreement.” “We have demonstrated our ability to rapidly access the capital markets for flexible, term-debt financing to support our continued growth,” executive vice president Thomas Plagemann said in a statement. The $200 million will be available in two tranches — $75 million at 5.5% interest and $125 million at 8% interest. Credit Suisse analyst Patrick Jobin earlier called the loan’s terms “onerous.” But Vivint Solar says the financing is structured to allow it to utilize cash flow generated by the operating portfolio — under specific circumstances — to fund additional business initiatives. Image provided by Shutterstock .