SunEdison Inc. (NYSE:SUNE) fallen down 23.59% to $5.15 on Tuesday morning. The company is working on produce, develop and market silicon wafers. In addition, SunEdison is innovating in solar energy projects.
On Monday, shareholder rights law firm Robbins Arroyo LLP stated a class action complaint on SunEdison. The complaint asserts that officers and directors of SunEdison violated the Securities Exchange Act of 1934 between June 16, 2015 and October 6, 2015, by making essentially false and misleading reports about SunEdison's business prospects.
According to the complaint, SunEdison distorted investors by plugging the company's ability to sustain continued growth. In detail, in 2014 and 2015, the company released quarterly financial results showing that it was increasing net sales and ready for growth. SunEdison continued to take on new debt to fund growth, and on June 16, 2015, announced it had signed a merger agreement to acquire Globeleq Mesoamerica Energy. Just over a month later, on July 20, 2015, SunEdison announced it entered into another merger agreement with Vivint Solar Inc. (NYSE:VSLR), stating the merger would triple SunEdison's value.
However, as SunEdison continued extend its acquisition, the company became clear that it was struggling. On August 6, 2015, SunEdison released financial results for the second quarter 2015, reporting revenue loss of $263 million. Moreover, SunEdison’s debt stood at $11 billion which include several recent multi-billion dollar deals to new acquisitions. On October 5, when the company revealed that it was laying off 15% of its workforce and announced restructuring charges of $30 to $40 million for the third quarter 2015 through first quarter 2016, the company could no longer conceal its prior misstatements. After this news, SunEdison's stock dropped from a high of $30.96 on June 16, 2015 to $8.69 per share on October 6, 2015, or a 72% drop.
Shares of SunEdison have gotten a huge boost recently, but their problems go much serious than needing a tax subsidy to build projects. SunEdison has $11.7 billion in debt and needs huge funds to build its projects over the next few years. It seems like the stock of SunEdison will continue to be volatile for a while.