Sunedison Plunges Under $1 Following Report Of SEC Probe, TerraForm Global 8K
Shares of Sunedison Inc (NYSE: SUNE) plunged more than 30 percent in Tuesday's pre-market session in reaction to a Wall Street Journal report that the company is facing a Securities and Exchange Commission investigation.
The Wall Street Journal, citing "people familiar with the matter," reported after Monday's market close that the SEC is looking into SunEdison's disclosures to its investors relating to how much cash it claimed to hold in its balance sheet. Specifically, investigators are exploring the possibility that SunEdison overstated its liquidity position last fall when it claimed to hold more than $1 billion in cash.
The Wall Street Journal's sources suggested that while SunEdison claimed to hold $1.4 billion in cash, the company only had access to a few hundred million dollars. The remaining balance consisted of cash that was trapped inside power projects along with a $500 million credit facility that could only be accessed by delivering projects that achieved certain objectives.
Separately, TerraForm Global Inc (NASDAQ: GLBL) said in an 8K that its annual 10K filing will be dleayed beyond March 30. TerraForm Global identified material weakness in internal controls over financial reporting primarily due to SunEdison's ineffective controls over accounting consolidation and reporting system that it relies upon.
TerraForm Global shares were down 26 percent at $1.85 in the pre-market session, while Sunedison traded around $0.78, down 38 percent.
On Monday, Sunedison shares actually spiked about 12 percent -- before selling off to finish up about 4.5 percent at $1.26 -- amid a fake takeover report.
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