• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Energy

Thanks for Nothing: SunEdison Coverage Suspended at Cowen

After maintaining an Outperform rating on the troubled solar company, Cowen suspends coverage, saying it had investment case 'wrong.'
By CARLETON ENGLISH Mar 28, 2016 | 12:30 PM EDT
Stocks quotes in this article: SUNE, VSLR, TERP, GLBL

Exactly what are investors putting their money in when they invest in SunEdison (SUNE)? We just don't know, and analysts are starting to throw in the towel on the once-loved solar energy company.

On Monday, an analyst team at Cowen and Co. led by Jeffrey Osborne suspended its rating on Missouri-based SunEdison, citing reports of debtor-in-possession negotiations, legal uncertainty and a lack of financials. Until Monday, Cowen had an Outperform rating on the company with a $10 price target.

As a reminder, SunEdison delayed releasing its financials for 2015 twice so far. This means that the most recent audited financials investors have seen on the company are nearly six months old. And, even those numbers may be questionable. According to recent filings with the Securities and Exchange Commission, former executives of SunEdison made allegations about the accuracy of the company's anticipated financial position that may force it to reassess its liquidity position.

"We certainly have gotten the SUNE investment case wrong," Osborne wrote in Monday's note. "While we had concerns about the pace of growth of the company through M&A, what we got wrong in a big way was the inability for the company to sell assets to delever the balance sheet due to the litigation impact and 10-K delays."

Indeed, SunEdison's woes intensified in July when it announced plans to acquire Vivint Solar (VSLR) for $2.2 billion. The deal, which was revised downward in December, was ultimately scrapped in March after what Vivint called SunEdison's "failure to consummate the merger." As a result of the abandoned deal, Vivint is suing SunEdison.

"Endemic -- everyone thought there was a market for everything not that long ago; now there is a market for almost nothing in the space and no money to borrow," Jim Cramer said of SunEdison's dramatic fall.

While Osborne's previous bull case for SunEdison focused on the company's backlog of projects, he acknowledged that his investment thesis underappreciated the "chilling effect" of the company's delayed 10-K filing and the end of the of the Vivint deal on its ability to access capital and sell projects.

In Monday's note, Osborne included a timeline -- not unlike the one Real Money posted on Friday -- of the trouble the company faced since announcing the Vivint deal in July.

While investors await SunEdison's financials as the stock swings wildly in both directions, Osborne sees three options for the company: bankruptcy and subsequent restructuring; asset sales and "grinding it out through the court process;" and splitting up the company by decoupling the yieldcos, TerraForm Power (TERP) and TerraForm Global (GLBL), and using any proceeds to delever the balance sheet.

For now, however, it's anybody's guess.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are restricted from owning individual securities.

Cowen and Company, LLC and or its affiliates make a market in the stock of SunEdison.

TAGS: Investing | U.S. Equity | Energy

More from Energy

I'm AMPD About This ETF

Mark Abssy
Jun 6, 2023 11:30 AM EDT

The CNIC ICE U.S. Carbon Neutral Power Futures Index exchange-traded fund provides exposure to a blended national electricity price and carbon credits.

Here's How Investors Can Get in on Soaring Uranium Prices

Bruce Kamich
Jun 1, 2023 12:33 PM EDT

The charts of this fund are giving off a positive glow.

It's a Long Shot, but Here's My Ideal Scenario to Keep the Fed in Check

Bob Byrne
May 30, 2023 7:15 AM EDT

It involves people pocketing their savings from lower gasoline prices so that the economy cools and the Fed doesn't need to raise rates again.

3 High-Yield International Oil & Gas Majors

Bob Ciura
May 27, 2023 7:15 AM EDT

The top global energy names are returning more cash to shareholders through dividends and share repurchases.

CorEnergy Takes Important Step in Deleveraging

Jim Collins
May 25, 2023 1:15 PM EDT

However, the preferreds are no longer 'money good.' So a completely new 'distressed company' calculus has taken over.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 07:19 PM EDT CHRIS VERSACE

    AAP Podcast: This Company Is Not Going 'Solo'

    Listen in as I talk with the very diversified Solo...
  • 01:51 PM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Adjusting Your Trading Approach to Shifting Market...
  • 06:54 PM EDT CHRIS VERSACE

    AAP Podcast: A Tongue -- and a Market -- Twister: 'Get a Debt Deal Done'

    Listen in as the Action Alerts PLUS Podcast tackle...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login