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The Analyst That Sent Sunedison Down 30% Says Co. Just Made A 'Desperation Move'

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The Analyst That Sent Sunedison Down 30% Says Co. Just Made A 'Desperation Move'

Shares of Sunedison Inc (NYSE: SUNE) fell 8 percent early Thursday morning after the company detailed its new "asset-light strategy."

Sunedison said it plans on: 1) selling its Kuching, Malaysia silicon wafer production facility, 2) close its Pasadena, Texas polysilicon production facility, 3) refocus its Portland, Oregon operations into a cost effective R&D and technology demonstration center.

Sunedison noted its SMP joint venture is on track to meet key polysilicon production and cost targets. The company added that all of its initiatives will result in a $266 million non-cash impairment charge and $171 million in other restructuring charges in its fiscal fourth quarter 2015 results with an additional $10 million to $13 million in other restructuring charges expected in fiscal 2016.

Related Link: UBS Cuts Sunedison's Target To $0.75 As Execution Concerns Are Starting To Materialize

"We are moving forward on several fronts with our asset-light strategy for the upstream solar materials business," said Ahmad R. Chatila, SunEdison's chief executive officer. "We believe our actions to re-engineer this business will maximize the value of our world-leading silicon production technologies, enabling SunEdison's long term downstream growth and curtailing headwinds caused by trade actions and the commoditization of certain products."

Gordon Johnson: Sunedison Remains A 'Distressed Company'

Sunedison's stock tanked 30 percent after Axiom's Gordon Johnson was a guest on Benzinga's #PreMarket Prep on January 12. During the show, the analyst expressed concerns over the company's debt load and financing raises.

When asked if Sunedison's new financing deal was a good move, Johnson responded, "Absolutely not. I think this deal makes me more cautious on the company's ability to make it through 2016."

Johnson's bearish stance appears unchanged following Sunedison's announcement of its "asset-light strategy." In am email to Benzinga on Thursday, Johnson again questioned Sunedison's debt load.

"Does this resolve their debt issues?" the analyst wrote in his email. "Or, is this yet another set of some form of cash charges that will further depleted SUNE'S all-to-important cash balance. This is a desperation move."

Johnson noted that Sunedison's fate "remains one of a distressed company" and its announcement "does very little, if anything, to resolve that."

Latest Ratings for SUNE

DateFirmActionFromTo
Mar 2016Stifel NicolausTerminatesHold
Mar 2016Axiom CapitalMaintainsSell
Mar 2016Avondale PartnersDowngradesMarket OutperformMarket Perform

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