You don't even want to know what Wall Street's nightmare stock did today
The shares fell 15%.
SunEdison started falling in July, when an attempt to acquire residential-solar firm Vivint revealed that the company's cash position wasn't as secure as investors thought.
Part of the problem, according to billionaire investor David Tepper, who is suing the company, is that SunEdison was passing on bad deals to its subsidiaries called yieldcos. Yieldcos act like utilities, collecting money from solar projects SunEdison installed. In Vivint's case, the yieldco in question is called TerraForm Power.
Tepper's hedge fund, Appaloosa Management, which has an almost 10% stake in TerraForm Power, brought its lawsuit at the end of last year. Since then, SunEdison has delayed its annual report, and said that it will suspend its dividend.
Now that you've got all that, here's what dragged SunEdison's stock down on Thursday.
- First off, it looks like the banks financing the Vivint deal are thinking twice about loaning money to SunEdison, according to a Wall Street Journal report.
- Then there are the downgrades. Macquarie cut its rating of the stock to neutral, and its price target from $20 to $2.
- Analysts at Needham cut their rating from buy to hold.
- And analyst at Credit Suisse wondered if Vivint itself may have reason to sue SunEdison.
The stock closed the trading day at $1.52.
