SunEdison, the solar manufacturing company that has been the bane of Wall Street’s existence since it started crashing in July, had a wonderful day.
That’s rare.
The stock surged 36% in Thursday’s trading day.
The reason why SunEdison surged is related to why it plummeted in the first place: its attempt to acquire residential solar company Vivint.
From Bloomberg: “Vivint shareholders led by Blackstone Group LP., which owned 77 percent of the shares at the start of the year, approved the $1.9 billion deal Wednesday, with more than 100 million votes in favor and 101,000 against.”
SunEdison’s shares took a nosedive when the Vivint deal was announced in July because its terms revealed to investors that SunEdison was likely not as cash-rich as they assumed. Additionally, the deal included “take or pay agreements” with TerraForm Power, SunEdison’s yieldco — a sister company it created to manage its projects like a utility.
The take-or-pay agreement, which forces TerraForm to buy certain Vivint assets, upset hedge fund manager David Tepper of Appaloosa Management, a TerraForm shareholder. He doesn’t think that those assets are as valuable as SunEdison is making them out to be, so he’s suing SunEdison over the deal.
And while SunEdison had a monster Thursday, it’s still down 92% over the last year.
So this ain’t over yet, people.
As reported by Business Insider