Sunedison Inc SUNE shares largely bucked off commentary from Axiom's Gordon Johnson on Tuesday highlighting the potentially "scary" scenario the company would be in if it misses a coming preferred dividend payment.
According to Johnson, Sunedison was due to announce its cash dividend payment on Series A Preferred Stock last Friday, but stayed quiet.
"[W]ith this announcement lacking, some are assuming SUNE may have cash issues much more pronounced than already feared," he added.
Speaking to Benzinga, Avondale Partners' Michael Morosi said he didn't think fears of a missed payment are "material" to shareholders at present. "The company has not missed a payment yet. Their next preferred dividend payment is due March 1st," he wrote.
"Their previous dividend was declared a couple weeks before payment was due, and they have yet to declare this payment."
Sunedison is able to make this payment in cash or stock, giving it the option to avoid impairing its liquidity by issuing stock. An all-stock payment would equate to 6.4 million shares, Morosi said, making it 1.6 percent dilutive.
Sunedison shares are up 9.2 percent on Wednesday morning, but are still down 46 percent since Johnson's comments on January 12 that questioned the company's ability to survive 2016.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.