A $2.2 billion prospective acquisition of Vivint Solar (NYSE: VSLR) was ill-received by the market, and the significantly worse-than-expected earnings that followed in August 2017 motivated a rapid decline in SunEdison stock, as investors began to doubt the viability of the business model. Facing another large contraction in revenues, falling liquidity ratios and rising financial leverage, the firm began taking drastic steps to protect its financial health.
SunEdison repeatedly delayed its annual filing, citing material weaknesses in internal controls that jeopardized the accuracy of reporting. The company filed for bankruptcy in April 2016 and spun off its subsidiaries TerraForm Power Inc. (NASDAQ: TERP) and TerraForm Global Inc. (NASDAQ: GLBL). The company also obtained new financing to meet short-term obligations and pursue continued operations.
- SunEdison: A Classic Wall Street Boom-and-Bust Story, Investopedia.com, October 9, 2017.
About the author:
Zhang Xin is Trainer at chinadaily.com.cn. He has been with China Daily since 1988, when he graduated from Beijing Foreign Studies University. Write him at: zhangxin@chinadaily.com.cn, or raise a question for potential use in a future column.
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