Sunedison Inc (NYSE: SUNE)
Sunedison is having an incredible day in the market today, and for good reason. The company announced the completion of an independent investigation that came out with relatively positive results. Today, we’ll talk about the details of the investigation, why this is so important, how the market reacted to the news, and what we can expect to see from SUNE moving forward. So, let’s get right to it…
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SUNE Announces The Completion Of An Investigation
Sunedison has been having an incredibly rough time as of late due to financial strain the company is dealing with. The worst part about it is that the company is being looked into with regard to misleading investors. As a result, SUNE performed its own independent investigation. The investigation result was overwhelmingly positive, showing that the financial statements offered were appropriate and did not have any material misstatements. Furthermore, the evaluation showed that there was no solid evidence of fraud or misconduct by SUNE management with regard to an employee that was said to have wrongfully acted in the negotiations over the Vivint Solar deal termination.
Why This Is So Important
As mentioned above, SUNE has had quite a bit of trouble with regard to its financial statements and views that the company may have misled investors. As a result, the company is being looked into by the Department of Justice as well as the United States Securities and Exchange Commission. Both of these agencies are focused on whether or not the company overstated its liquidity position last year as it reported $1 billion in cash. The positive news today shows that the independent investigation found nothing. As a result, investors believe that the DOJ and SEC investigations will come up empty as well – meaning that SUNE will be able to move forward without legal action.
How The Market Reacted To The News
As investors, we know that the news moves the market. Any time there is positive news released with regard to a publicly-traded company, we can expect to see gains in the value of the company’s stock. Adversely, when negative news is released, we can expect to see declines. In this particular case, the news that was released was overwhelmingly positive, leading to an overwhelmingly positive reaction. Currently (10:42), SUNE is trading at $0.58 per share after a gain of $0.21 per share or 56.71% thus far today.
Does This Mean It’s Back To Business As Usual At Sunedison?
Well, not quite. You see, Sunedison is still facing extreme financial pressure, and that pressure is still concerning for many investors. At the moment, SUNE has massive amounts of debt that it will have to get around. However, the news does mean that the company will likely not have to deal with the additional strain associated with fines and possibly arrests from the DOJ and SEC, which is great news.
What We Can Expect To See Moving Forward
Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from SUNE. Sure, the company has reached a hurdle, and they will have to find a way over that hurdle, but they are not to be counted out quite yet. At the moment, with the tremendous declines we’ve seen on the stock as of late and the financial pressures facing the company, it seems as though everything is lining up for an acquisition. An acquisition would allow SUNE to be relieved of debt while allowing whoever acquires the company to get it at an incredible discount. While there have been talks of bankruptcy, I don’t think this is going to happen. The truth is that the finances at Sunedison are far to complex for a simple bankruptcy to be the cure for the problem. The company has several assets, many of which are already up for sale, which will cut into the money owed to creditors. All in all, the company is in a rough spot, but like other greats in the past, I believe they will get through it and, in the long run, those who held on will be happy they did.
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What Do You Think?
Where do you think SUNE is headed and why? Let us know your opinion in the comments below!
[Image Courtesy of Wikipedia]