SunEdison gets caught in energy downdraft
For most of the past year, SunEdison Inc. could do no wrong in the stock market’s eyes.
The solar energy sector was hot and, in a clever bit of financial engineering, SunEdison had spun off its completed projects into a separate company. This entity, a so-called yieldco, promised the high and growing dividends that investors seemed to crave. A series of acquisitions only made the story better.
Then SunEdison somehow lost its Midas touch. Its latest acquisition, announced July 20, got an icy reception from investors. It had to cut the price of a second yieldco, which made its stock market debut on July 31 and promptly began falling.
The downdraft got worse last week when SunEdison reported a larger than expected second-quarter loss. The Maryland Heights company’s shares have lost half their value in three weeks, wiping out $5 billion of market capitalization.
