No one can say that SunEdison Inc. (NYSE: SUNE) has failed to provide more than its share of excitement since last summer. In late June of 2015, shares traded above $33; Thursday night shares closed at $1.51. In Friday’s premarket, shares are up nearly 20%, after losing more than 15% on Thursday.
Friday’s boomlet is the result of a settlement with Latin America Power Holding, a Chile-based power company that had agreed to be acquired by SunEdison and then sued the U.S. solar provider when SunEdison basically walked away from the deal in October 2015 by failing to make a $400 million upfront cash payment on the $700 million purchase price. The two companies argued about which was at fault for the deal going sour, and Latin American Power ended up filing suit last month in New York state court.
Under the settlement, SunEdison will make a payment of $28.5 million to Latin American Power. TerraForm Power Inc. (NASDAQ: TERP), SunEdison’s yieldco and also a defendant in the lawsuit, incurred no payment obligation under the terms of the settlement. Furthermore:
None of the parties has admitted to any wrongdoing or liability with respect to the claims asserted in the arbitration and New York state court action, and the parties have granted each other full releases subject to the fulfillment of SunEdison’s payment obligations under the settlement agreement.
The settlement really is a plus for SunEdison. The company has had trouble getting financing for its acquisition of Vivint Solar Inc. (NYSE: VSLR) and that news pummeled the stock earlier this week. The Latin American Power lawsuit was cited as one of three major overhangs by analysts at Bank of America Merrill Lynch last month when they cut their rating on the stock from Buy to Hold and cut the price target from $10 to $2.50.
SunEdison CEO Ahmad Chatila made our list of CEOs who should be fired in 2016. He’s been in charge since 2009, and the stock price collapse since last June can fairly be attributed to the growth-at-any-cost policy the company has followed.
But now all is forgiven. Shares traded up 19% at $1.80 in Friday’s premarket session. The stock’s 52-week range is $1.21 to $33.45, and the consensus price target is $9.16.
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
