It may be lights out for SunEdison (SUNE). Its stock price plunged more than 30% to below $1 on Tuesday in pre-market trading, following a Wall Street Journal report that said the Securities and Exchange Commission was investigating whether the Missouri-based solar company overstated its liquidity position last fall.
Representatives from the SEC and SunEdison declined to comment.
The WSJ report also said, citing sources close to the matter, that SunEdison was working with outside advisors on a potential bankruptcy filing.
The possibility that SunEdison may seek bankruptcy protection was confirmed on Tuesday morning via an SEC filing from SunEdison's yieldco, TerraForm Global (GLBL), which cited SunEdison's liquidity difficulties and said there was a "substantial risk that SunEdison will soon seek bankruptcy protection."
In a presentation accompanying its third quarter results, SunEdison said it had nearly $1.4 billion in cash. Some of that cash was slated for the planned purchase of Vivint Solar (VLSR), business optimization, and the earnout payment from its acquisition of First Wind.
WSJ sources said that the figure was overstated, as much of the cash couldn't be accessed by SunEdison as it was already earmarked for project construction.
In a January 2016 business update presentation, SunEdison said it expected to have $56 million cash on hand at the end of the fourth quarter after paying down margin loans and committing cash for construction.
As SunEdison has yet to release its 2015 financials, investors are left piecing together statements the company made alongside a mix of presentations -- some of which contain audited financials and others that do not.
Last month, the company announced that it had to delay releasing its financials following allegations made by a former executive that questioned the accuracy of SunEdison's anticipated financial position. Two weeks later, the company announced it would have to further delay releasing its financials as management identified "material weaknesses in its internal controls" over financial reporting. The company also announced that it had not yet concluded its investigation into the allegations made by a former executive.
During the company's third quarter earnings call in November, CEO Ahmed Chatilla said the following when asked about early delays in SunEdison's plans to acquire Vivint.
"We recognize that it's taking a little bit longer than it should. But don't read too much into it. There's not much more in here."
The deal was ultimately abandoned earlier this month, after Vivint pulled out due SunEdison's "failure to consummate the merger."