Jan. 9, 2016 10:00 AM ET
About: SunEdison (SUNE)
Disclosure: I am/we are long SUNE. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
•SunEdison, in its inimitable style, did a transaction that the market finds hard to grasp.
•The transaction provides about $550M of cash for operations, for closing the Vivint deal, and sets the Company on track for a strong 2016.
•The stock continues to be significantly undervalued in spite of this high cost transaction
I believe that there is a strong likelihood that the announced deal is much larger than it seems based on the press release. If I am correct, this deal certainly benefits both parties. SUNE will have managed to de-lever itself substantially by reducing their future liabilities by $500 million+, while the Buyers will most certainly have picked up 350+ MW of development projects at what is likely a solid discount. While SUNE is very likely giving up value by doing this deal, it will drastically improve their short term liquidity position.
Of course, there is certainly the possibility that my grand prediction is off base. However, it seems clear that at a minimum, the company has reduced their near term cash requirements. Given that the stock is trading at current levels only due to liquidity concerns, I expect to see it move upwards once the company provides us with more details on the transaction. As I laid out last week, a conservative sum-of-the-parts analysis indicates that they should be trading at over $12/share.
we are about to loose trust and confidence now at the end of 2015 !!! should we cash in our losses or loose more holding for the 2016.......
all storms of repeated same bad news and pre market drops in line with shorts increased so the down play to bottom and it did bottom at 5.00. Buying and cumulating at this level is smart buying also will bring it up along with smart covering understanding this fact.
wizardofwheeler wrong I don't believe of shorting stocks at all ... I buy long though I do trading some times , but never shorting stock. some times I short TVIX around 10$ .
I would go with the basics , by definition every short eventually is a buyer , SUNE is in better shape now and had strong financial institutions as partners and more on board for buying more assets. shorts are going to buy and most likely rush to cover when we hear good news any time. use your own judgment and follow
while business as usual at SUNE however one simple inquiry from loosing investor wiped out most of the company to reach 30% drop at one point!! amazing how sensitive SUNE reacts !!! cant you just do some PR to assure the serious investors not to worry ?
so many longs sold SUNE with profits at 4$ & 5$ and 6$ all excepted to buy it again cheaper but didn't happen. shorts are in much worse shape. If you in SUNE stay long for a few months will go back to 12 $ range.