The shareholders say that the information TerraForm filed with the Securities and Exchange Commission in anticipation of its IPO was misleading because it did not disclose that SunEdison was about to report disappointing financial results for the 2015 second quarter.
TerraForm Global misled shareholders into investing $620 million into the renewable-energy company, and its stock dropped by over 50 percent within three months, shareholders say in a class action filed in state court.
Lead plaintiff Simon Fraser's securities class action, filed Friday in San Mateo County Superior Court, asserts violations of the Securities Act against TerraForm Global and its parent company SunEdison Inc.
The complaint is the Top Download for Courthouse News on Tuesday.
TerraForm, which owns and operates renewable-energy generation assets worldwide, was created by solar company SunEdison to serve as an investment vehicle to fund SunEdison projects.
Called "yieldcos," such investment vehicles created by parent companies "have become popular among investors seeking dividends, and TerraForm Global was marketed to such dividend-seeking investors as a 'high-growth' company," the shareholders say in their 20-page complaint.
On Aug. 4, the company completed its initial public offering of 45 million shares at $15 per share, leaving TerraForm with net proceeds of approximately $620 million from the IPO.
SunEdison issued a press release two days later disclosing second quarter losses of nearly 40 cents more per share than estimated, which caused TerraForm's stock to decline by $2.39, the lawsuit says.
A month later, SunEdison insiders revealed during an Oct. 7 investor conference call that the company was shifting its focus away from yieldcos such as TerraForm and indicated a slowdown in the acquisition of energy-generating assets, including solar and wind assets, the shareholders say.
SunEdison also said it was reducing its workforce by up to 15 percent, according to the lawsuit.
On Thursday, TerraForm's shares dropped to $7.94 for a cumulative loss of more than $7 per share in less than three months.
The shareholders say that the information TerraForm filed with the Securities and Exchange Commission in anticipation of its IPO was misleading because it did not disclose that SunEdison was about to report disappointing financial results for the 2015 second quarter.
SunEdison failed to disclose that it was changing its business strategy in a way that would hurt TerraForm, the shareholders say.
The class seeks to represent anyone who purchased the common stock of TerraForm Global pursuant to the company's alleged false statements issued in connection with its IPO, and asks for compensatory damages.
Besides TerraForm and SunEdison, the class action also names TerraForm's CEO, chief financial officer and senior vice president; JPMorgan Securities; Barclays Capital; Citigroup Global Markets; Goldman Sachs; Merrill Lynch, Pierce Fenner & Smith; Deutsche Bank Securities; BTG Pactual US Capital; Itau BBA USA Securities; SMBC Nikko Securities America; SG Americas Securities; and Kotak Mahindra. The financial institutions participated as underwriters for the IPO, the class says.
They are represented by Lesley Portnoy with Glancy Prongay & Murray. Portnoy did not immediately respond to a request for Both TerraForm and SunEdison declined to comment.
Source: http://www.courthousenews.com/2015/10/27/terraform-investors-say-sunedison-duped-them.htm
Wednesday, October 28, 2015
Thursday, October 08, 2015
SunEdison, Shares Fizzling, Promises a New Strategy
Alternative-energy firm to stop selling solar and wind farms to its own affiliates, to lay off 1,000
SunEdison Inc., the big solar-power developer whose stock has fallen abruptly out of favor with investors, tried to woo them back Wednesday with promises to revamp its business strategy.
Monday, October 05, 2015
Layoffs at SunEdison as Investors Question the Renewable Energy Developer’s Strategy
SunEdison will hold an investor call on Wednesday at 8 am to detail the company's new strategy.
In mid-September, SunEdison rented out the House of Blues in Disneyland and held a private party for hundreds of solar professionals at the industry's biggest U.S. conference, Solar Power International.
It started off as a normal gathering. People mingled at multiple bars. A house band played on a small stage upstairs. Waiters handed out meat on sticks.
Suddenly, all the televisions throughout the bar displayed a mysterious countdown clock. When it hit zero, the party transformed. In a blur of multi-colored lights and electronic music, go-go dancers, and men in yellow body suits carrying giant glow sticks filled a multi-level stage in the back of the building. Balloons rained down on the dancing crowd. People sported body paint, fake mustaches and oversized sunglasses.
It was a celebration that a company at the top of its game would throw. Except SunEdison was not at the top of its game.
At the time of the party, the company’s stock had tumbled from a 52-week high of $33.45 down to $11.50. And the stock price of its YieldCo, TerraForm Power, had fallen from $42.15 to $21.61 over the summer. In July, SunEdison had a market cap of more than $9 billion. Today, its market cap is $2.6 billion.
In retrospect, the countdown clock could be interpreted as an ominous sign.
Investor confidence had been wavering for some time. Many were having a hard time understanding SunEdison's acquisition spree -- specifically, the $2.2 billion purchase of the residential installation company Vivint Solar in July.
Executives called the Vivint acquisition a big step toward creating the first renewable energy supermajor. The street wasn't fully convinced of the plan.
With its stock still under pressure, SunEdison is now culling its workforce. According to a company-wide memo from CEO Ahmad Chatila released on September 30, SunEdison will be laying off around 10 percent of its 7,300 employees. Many employees received notices on Friday.
"Overall, the proposed changes result in an overall reduction of about 30%, 20% being from non-labor expenses and about 10% from headcount reduction. And this process will take some time to complete. Most of the changes will be announced during the fourth quarter with some final steps expected in the first quarter of 2016," reads the memo.
The staff reduction will come through integrating acquired companies and "eliminating redundancy." It will also come from simplifying management structures in different areas of the business, and focusing on a smaller range of geographic regions.
The cuts have reached all the way to the VP level, but not the executive level. Sources within the company expressed worry and surprise that the cuts didn't impact the architects of the Vivint acquisition.
When asked for comment, SunEdison would not address the cuts specifically.
We are proposing to take several actions around the world to optimize our business, align with current and expected market opportunities and position ourselves for long-term growth. In October we plan to provide investors with a more comprehensive view of our business structure and go-forward strategic growth plan in a conference call," wrote spokesperson Gordon Handelsman in an email.
The company is expected to inform investors of its new strategy sometime this week.
"Now it is time to take the next step in optimizing our business. Over the next six months, we are going to optimize our platform to take advantage of efficiencies, enhance cost savings, increase gross margins, and target investment areas with the greatest opportunity," wrote Chatila in the memo.
Read the entire article
In mid-September, SunEdison rented out the House of Blues in Disneyland and held a private party for hundreds of solar professionals at the industry's biggest U.S. conference, Solar Power International.
It started off as a normal gathering. People mingled at multiple bars. A house band played on a small stage upstairs. Waiters handed out meat on sticks.
Suddenly, all the televisions throughout the bar displayed a mysterious countdown clock. When it hit zero, the party transformed. In a blur of multi-colored lights and electronic music, go-go dancers, and men in yellow body suits carrying giant glow sticks filled a multi-level stage in the back of the building. Balloons rained down on the dancing crowd. People sported body paint, fake mustaches and oversized sunglasses.
It was a celebration that a company at the top of its game would throw. Except SunEdison was not at the top of its game.
At the time of the party, the company’s stock had tumbled from a 52-week high of $33.45 down to $11.50. And the stock price of its YieldCo, TerraForm Power, had fallen from $42.15 to $21.61 over the summer. In July, SunEdison had a market cap of more than $9 billion. Today, its market cap is $2.6 billion.
In retrospect, the countdown clock could be interpreted as an ominous sign.
Investor confidence had been wavering for some time. Many were having a hard time understanding SunEdison's acquisition spree -- specifically, the $2.2 billion purchase of the residential installation company Vivint Solar in July.
Executives called the Vivint acquisition a big step toward creating the first renewable energy supermajor. The street wasn't fully convinced of the plan.
With its stock still under pressure, SunEdison is now culling its workforce. According to a company-wide memo from CEO Ahmad Chatila released on September 30, SunEdison will be laying off around 10 percent of its 7,300 employees. Many employees received notices on Friday.
"Overall, the proposed changes result in an overall reduction of about 30%, 20% being from non-labor expenses and about 10% from headcount reduction. And this process will take some time to complete. Most of the changes will be announced during the fourth quarter with some final steps expected in the first quarter of 2016," reads the memo.
The staff reduction will come through integrating acquired companies and "eliminating redundancy." It will also come from simplifying management structures in different areas of the business, and focusing on a smaller range of geographic regions.
The cuts have reached all the way to the VP level, but not the executive level. Sources within the company expressed worry and surprise that the cuts didn't impact the architects of the Vivint acquisition.
When asked for comment, SunEdison would not address the cuts specifically.
We are proposing to take several actions around the world to optimize our business, align with current and expected market opportunities and position ourselves for long-term growth. In October we plan to provide investors with a more comprehensive view of our business structure and go-forward strategic growth plan in a conference call," wrote spokesperson Gordon Handelsman in an email.
The company is expected to inform investors of its new strategy sometime this week.
"Now it is time to take the next step in optimizing our business. Over the next six months, we are going to optimize our platform to take advantage of efficiencies, enhance cost savings, increase gross margins, and target investment areas with the greatest opportunity," wrote Chatila in the memo.
Read the entire article
Why is SunEdison/First Wind giving so much money away to so called environmental groups in Maine?
It started off as a normal gathering. People mingled at multiple bars. A house band played on a small stage upstairs. Waiters handed out meat on sticks.
Suddenly, all the televisions throughout the bar displayed a mysterious countdown clock. When it hit zero, the party transformed. In a blur of multi-colored lights and electronic music, go-go dancers, and men in yellow body suits carrying giant glow sticks filled a multi-level stage in the back of the building. Balloons rained down on the dancing crowd. People sported body paint, fake mustaches and oversized sunglasses.
It was a celebration that a company at the top of its game would throw. Except SunEdison was not at the top of its game.
"You cannot 'rationalize' what is not rational to begin with - as if lying were called 'truthization.' There is no way to obtain more truth for a proposition by bribery, flattery, or the most passionate argument - you can make more people believe the proposition, but you cannot make it more true". -- Eliezer Yudkowsky
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