If the DOJ finds out that fraud was committed they will be arrested like Jeff Skilling and Ken Lay. I also think that an employee released information to Tepper on the Vivint deal. If that is found to be true David Tepper will be bailing out Sune investors in a big way.
Debt is not the issue, it is the interest on the debt which is eating away money for operating expenses. Stopping the interest or restructuring the debt would be very positive. The debt holders have a choice 1) restucture to give the companay and its stock a chance to recover, or let it go chapter 7 and liquidate 20 cents on the dollar. The other way they can recoup their investment plus interest. Chapter 7 they lose their shirt.
I believe the bondholders have as much to lose as shareholders. They should work out better terms with management. IF this goes chapter 7 they will get 40 cents on the dollar. It is in their best interest to sieze the board and show good corporate governance to sell off assets and get debt down and raise cash, but only at the right time.
For the last year Carlos Domenech sold his stock immediately after it was vested. I believe he knew that this company was being financially engineered and cash was not as strong as it should be. He was on board with the Vivint deal and than realized it was bad. He balked and was forced out and told them we can't do it because our cash is being overstated as he walked out the door. The SEC can confirm who the whistle blower was, since they did it to save their #$%$. In the last year he sold $10 million in stock he made about $8 million. If fraud was committed Domenech, Wuebbels and Chatilla should be arrested. I would check and make sure they don't head for the boarder.
First of all I believe that 11billion in debt is incorrect. Since they sold off some assets and paid down debt. It is more like 10 billion but that is for Sune, Terp, and Glbl. If you strip out the yieldco debt it is about $6 billion. Cash is the issue here was that 2.3 billion in cash co-mingled so could sune have only a billion or 500 million. This is a workout and they will have to sell off assets to bring down debt and raise cash. The problem is the sharks only want to buy assets at 60 cents on the dollar.
I think we should only talk about the current 10K, If it goes back any further we can make a good case of fraud on the the part of shareholders.This works out better if they file for BK, since shareholders of common are entitled to money. A regular BK could wipe out common shareholders. I am hoping that there is no bankruptcy.
They have $11 billion in debt. I think this is ludicrous
I find this obsurd to think that they are looking for $300 million to bail out the company. If the spokesman is lying by saying we will not comment on market speculation and rumors, Chattila and Wuebbels should be arrested for fraud. Its one thing when rumors are out there and you say nothing but when you comment and say we will not comment on rumors and speculation that should be taken as we are not looking at DIPS financing. Right now we need to sell of assets and get down our debt it is as simple as that.
Vivint today for the third time has lowered their guidance moving forward. In any lawsuit SUNE will be able to say that it became apparent that the deal that they negotiated and re-negotiated could not be done due to Material adverse changes (MAC) on Vivints business. In fact SUNE should sue on behalf of all SUNE shareholders since this deal almost destroyed this company. In any lawsuit that Vivint files against Sune, management and lawyers will invoke MAC forced Sune to be unable to complete this deal, and forcing Vivint to terminate the deal. The investment bankers forced Sune's hand by backing out leaving them unable to complete the deal.
They have a weak case for a lawsuit because they terminated the deal. They gave updated guidance on their earnings twice. Each time lowering earnings and sales. It is not a one way termination it was contingent on financing. If the banks back out Vivint has no choice but to call off merger or make all stock deal, and they did not want to do that.
They could not just walk away when the stock was getting hammered without paying a break up fee, however it is in the fine details of the merger that if the banks won't lend the deal is dead. This will start the healing process of Sune and it will begin to take off again. Not because the deal is dead but because they are out of a bad deal, and $2 billion less debt. Tepper is not against Terp taking drop downs, but he wants good assets and he felt rooftop was a dead business.