SunEdison Inc’s (NYSE:SUNE) financial status has repeatedly come into question this year. With the firm on the cusp of becoming a penny stock, many want to take a look inside the books. But it isn’t only investors and analysts who can’t fathom the solar firm’s fiscal picture, but employees, both current and former, also are unable to.
SunEdison’s ‘Liquidity Position Is Difficult to Assess’
What’s the future of SunEdison? Investors aren’t unsure, analysts are somewhat in the middle and shareholders are demanding change. But it seems employees don’t know much about the internal finances of the firm.
Questions have come up about the solar firm’s liquidity. To clear up confusion and dispel any doubts about the worst-performing clean-energy firm, it has established an inquiry into its financial position.
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The firm confirmed Monday that it started an internal inquiry late last year due to “allegations made by former executives” about its financial status. It also said that an internal audit committee is looking into the “accuracy of its anticipated financial position” to quash any concerns made by workers.
To this date, has the firm found anything? Not yet. But this is just another piece of evidence that many people in all sorts of roles are uncertain about the books over at SunEdison Inc’s (NYSE:SUNE). With acquisitions, sales, high debt and corporate changes, it can be difficult to assess the books and give a clear cut answer to all involved parties.
With that being said, the solar firm warned investors of possible issues if auditors do find something wrong with the numbers.
It seems one analyst has already put the thumbs down on the firm.
Axiom analyst Gordon Johnson, who has been a strong critic of SunEdison, told Benzinga on Wednesday that he has downgraded the stock because of a paucity of liquidity.
He stated that the firm’s troubles stem from a yield company strategy that enabled it to buy projects at below market rates. This means it reduced the capital costs by lowering the return they could take on projects.
“We don’t know for certain everything, because they don’t disclose everything,” Johnson said. “But this is a company that’s in distress.”
What’s Axiom’s price target for SunEdison? $0.39. Ouch!
Stock Likely to Slump Again
After a strong week, SunEdison was up to its old ways. During the Monday trading session, shares tumbled 29 percent over a lawsuit from two Brazilian firms. The firm has faced many lawsuits this year.
Despite shares being up Wednesday, many feel it won’t last because the firm said it would delay the results of its full 2015 financial results due to the inquiry.
Colin W. Rusch, an analyst at Oppenheimer & Co, had to slash the stock to “hold” because of the news. Patrick Jobin, an analyst at Credit Suisse Group AG, is now questioning the future of the firm. Rusch and others are wondering how it would be able to raise capital without proper disclosures.
“It’s frustrating because you can’t get a grasp of what’s actually happening here,” Jobin told Bloomberg News. “I have never seen something so strange. The company’s in a precarious position.”
Year-to-date, SunEdison shares have fallen 67 percent to around $1.70.