SunEdison Shares Rebound From Lows; Analysts Don't Seem Concerned With Appaloosa Suit News

Investors in

shares received a spook Wednesday morning as a

of a suit against the company by David Tepper and Appaloosa Investment Limited Partnership hit newswires. While shares initially moved higher following the opening bell at 9:30 a.m. EST, sellers stepped in after about 15 minutes to take the stock to a session low at $2.50, down about 18 percent. Over the course of the morning session, and amid seemingly reassuring comments from a couple Wall Street analysts, SunEdison shares are now trading just 3 percent lower. The Benzinga Newsdesk, reaching out to the New Castle County Chancery Court in Delaware, has since confirmed the suit by Appaloosa related to

deal with

. Noted analyst Gordon Johnson of Axiom Capital, whose

on Benzinga's PreMarket Prep show contributed to a large sell off in SunEdison shares on Tuesday, seemed a bit skeptical about the apparent impact of Wednesday morning's news on the stock. Johnson, speaking with Benzinga, pointed to the fact that TerraForm Power had previously offered, in filings with the SEC, a warning that SunEdison could harm shareholders in TerraForm. Another analyst, Avondale's Michael Morosi, offered several outcomes related to the report of the suit, suggesting that two of those scenarios could be wins for SunEdison. "...the most likely scenario is that within the next two weeks SunEdison announces a deal to sell Vivint's operating assets to a third-party institutional investor and outlines its intent to find an offtaker for the development pipeline," Morosi said. Another option, according to the Avondale analyst, would be an indefinite postponement of the deal until the suit is resolved. Morosi said, "Depending on the outcome of the lawsuit, SUNE may have grounds to elect a "material adverse change" clause, allowing the company to break the transaction. While this would imply a reduction to run-rate deliveries and cash earnings, given resi's expected positive contribution to corporate average gross margin,

"