It's no secret that Sunedison (NYSE:SUNE) has been having an incredibly rough time in the market as of late. Unfortunately, bad news started to roll in a few months ago, and since then, the stock has dropped from over $30 per share to well under $1 per share. While there are a couple of things that could happen that would send SUNE upward. Chances of them happening seem to be rather slim. Today, we'll talk about the issues that the company is facing, what would need to happen to save SUNE, and what we can expect to see moving forward.
SUNE Is Facing A Ton Of Problems
Sunedison has spent quite a bit of time building its company. At first, all they did was make solar panels. However, they had their eyes on the prize and took a very aggressive approach to making their way to it. Over the course of a short period of time, the company spent more than $3 billion acquiring wind and solar companies. On top of that, they spent massive amounts of money building solar power plants and setting up agreements to sell the power generated to utility companies. The only problem was... well, they didn't quite have the money to spend. As a result, the company found itself dealing with massive amounts of debt.
From there, the story only got worse. Once investors started to talk about the debt, we started to see a wave of bad news hitting the company. Law suits started to come up with regard to SUNE misleading investors, sending their stock down another notch. From there, the agreement to purchase Vivint Solar (NYSE:VSLR), a key part of the company's plan to take over the solar industry fell through, but that's not all. Vivint Solar turned around and took SUNE to court for not holding up their end of the deal. Now, there are rumors with regard to a Sunedison bankruptcy. All of this has taken the company from a blue chip stock to a penny stock, trading at under $0.30 per share at the moment.
While Chances Are Slim, SUNE Can Still Turn This Around
For Sunedison, there aren't many options. Of course, Chapter 11 bankruptcy is a big one. However, there are a couple of things that could happen that could help SUNE to avoid this fate. First and foremost, the company still has time to restructure its debt. Recently, SUNE was in talks with Rothschild, a company that could help them pull out of this mess through restructuring. Sure, it would be an uphill battle, and debtors would have to take less than they bargained for, but all in all, it is possible that the company could restructure, giving them more time to clean up the mess.
Another possibility for Sunedison is a buyout. If a hedge fund that already has a large stake in the company decides that it's not up for letting it all fall down the drain, and in stead, sees value in acquiring the company, or paying off its debts and taking it private, we could see SUNE revived. David Einhorn would be the company's best hope on this front, but who knows if that will take place either.
What We Can Expect To See Moving Forward
Unfortunately, the needle is pointing in the bearish direction at this point. The simple fact is that Sunedison has several hurdles to get over, and at this point, it looks like they may not be able to do it. However, there is always a silver lining to every dark cloud and anything can happen. While I'm hoping for the best, I'm expecting the worst.
What Do You Think?
Where do you think SUNE is headed moving forward and why? Let us know your opinion in the comments below!