Sunedison Inc (SUNE) Shares Fall Big Over Possible Dilution Concerns


Shares of Sunedison Inc (NYSE:SUNE) were down big today after investors began to weigh concerns of possible dilution via financing as analysts raised concerns. The stock was down all day today but fell considerably near the close of the market. This drop comes after a fairly large selloff of Sunedison Inc (NYSE:SUNE) shares on Monday which saw the stock drop over 7%.

“While the shares have rallied on positive liquidity datapoints, we still see equity solvency as challenged,” Julien Dumoulin-Smith, an analyst at UBS who has a sell rating on the stock, said in a research note on Monday. “While a warrant would not be unusual, management’s disclosure is unclear about form or magnitude.”

The big unknown right now is just how dilutive a potential $650 million financing deal could be to current shareholders. Initially the stock jumped 9.8% last Thursday when the company announced their discussions about financing in a filing. The stock is down slightly in after hours trading today. The stock decreased 8.56% or $0.47 on December 29, hitting $5.02. Approximately 42.72 million shares traded hands. SUNE shares have declined 81.87% since May 26, 2015 and are currently downtrending. It has underperformed the S&P500 by 79.60%.

From a total of 15 analysts covering SunEdison Inc (NYSE:SUNE) stock, 10 rate it a “Buy”, 2 a “Sell”, and 3 a “Hold”. This means that 67% of the ratings are positive. The highest target price is $42 while the lowest target price is $6.0. The mean of all analyst targets is $18.61 which is 270.72% above today’s ($5.02) stock price. SunEdison Inc was the topic of 41 analyst reports since July 21, 2015 according to the firm StockzIntelligence Inc. FBR Capital initiated shares on December 18 with a “Outperform” rating. JP Morgan maintained shares with a”Overweight” rating and a $19 target share price in their report from a September 29. UBS downgraded SUNE stock in a recent report from November 25 to a “Sell” rating. S&P Research maintained the rating on September 9. S&P Research has a “Strong Buy” rating and a $32 price target on shares. Finally, Axiom Capital downgraded the stock to a “Sell” rating in a report they issued on a November 12.

SunEdison, Inc. is a developer and seller of photovoltaic energy solutions, an owner and operator of clean power generation assets, and a developer and maker of silicon wafers. The company has a market cap of $1.85 billion. The Firm operates in three divisions: Solar Energy, TerraForm Power and Semiconductor Materials through SunEdison Semiconductor Ltd. (SSL). It currently has negative earnings. The Company’s Solar Energy segment provides solar energy services that integrate the design, installation, financing, monitoring, activities and maintenance portions of the downstream solar market for the Company’s customers.