Sunedison Inc (NYSE: SUNE)
Sunedison is having an incredible day in the market today, and for very good reason. The stock is climbing as the result of an acquisition announcement. This particular acquisition is very important. In fact, it has been in the works for some time, but investors on the other side of the equation have blocked plans. Nonetheless, it was recently announced that the acquisition is finally going through. Today, we’ll talk about the acquisition, what it means for SUNE, what we’re seeing from the stock as a result of the news, and what we can expect to see from SUNE moving forward. So, let’s get right to it!
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Sunedison To Acquire Vivint Solar
Recently, we’ve heard quite a bit of news from SUNE with regard to its plans to acquire Vivint Solar (VSLR). However, the planned acquisition was halted as investors raised concerns with the purchase on the Vivint side. Nonetheless, it was announced that the deal is finally going to go through. Vivint Solar held a vote with its investors and the overwhelming vote was yes. During the vote, 100 million votes were for the acquisition by SUNE while 101,000 went against the acquisition, meaning that Sunedison will be buying Vivint Solar after all. The acquisition will expand the horizons for SUNE in a big way, giving it more assets than ever before and the ability to generate solar energy like never before!
How Investors Reacted To The News
As investors, we’ve learned that any time positive news is released with regard to a publicly traded company, we can expect to see gains. In the case of SUNE this was much needed positive news as negativity has driven the stock down in a big way over the past few months. Nonetheless, we’re seeing massive gains today. Currently (11:57), SUNE is trading at $2.39 per share after a gain of $0.68 per share or 39.65% thus far today.
What We Can Expect To See Moving Forward
Moving forward, I have an incredibly bullish opinion of what we can expect to see from Sunedison. This opinion stems from several factors:
- Vivint Solar – To stay on topic here, let’s start with the Vivint Solar acquisition. By SUNE purchasing VSLR, they are opening the door to massive potential revenue as the largest player on the solar energy field! Overall, this is great for the company and its investors.
- Debt – One of the big concerns for SUNE investors has been debt. Let’s face it, Sunedison has a ton of debt. However, I have to say that I’m not concerned about the debt. The reality is that SUNE has a massive amount of assets to back up the debt. In fact, if it were to sell its assets, it would have enough money to pay off its debts and give investors $14 per share with the excess.
- Power Purchase Agreements – SUNE has been the subject of several power purchase agreements as of late. In fact, the company just announced a financing and power purchase agreement from a project in Japan. With these agreements, SUNE is guaranteed to drive tremendous revenue for years to come.
- Changes To The Energy Sector – Finally, we’re seeing quite a bit of movement with regard to how the world views energy. In the past, the burning of fossil fuels was the way to go. However, these days, we are aware that this leads to massive amounts of greenhouse gasses and horrible effects on our planet. As a result, Paris reached a landmark climate change deal late last year under which 195 countries have agreed to reduce their reliance on fossil fuels. This will lead to massive increases in demand for solar energy as well as other renewable energy. With SUNE being the biggest solar energy company in the world, it’s likely to take the lion’s share of revenue from the change in tides.
The bottom line here is that while SUNE has been dealt a bit of bad news as of late, things are actually looking great for the company. Considering the declines we’ve seen on the stock, even after today’s large gains, SUNE is still trading at a relatively steep discount. This gives investors the ability to get in on the gains at a great price!
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What Do You Think?
Where do you think SUNE is headed moving forward? Let us know your opinion in the comments below!
[Image Courtesy of Wikipedia]