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A Crazy Contrarian Theory: SunEdison Inc.


Perhaps the exchange to cover SUNE’s $150 million payment was not a big deal.

This theory hopes that SunEdison still has life left in it.

SUNE’s blackout period has left it vulnerable to extreme speculation.

Ok! The pieces are beginning to come together in the SunEdison (NYSE: SUNE) debacle. Recently we found out that SEC and DOJ are looking into SUNE and everyone panicked. Later we were informed that the reason for these 2 investigations are likely tied to the actions detailed in the TerraForm Global (NASDAQ: GLBL) lawsuit.

For those unfamiliar I'll give a quick summary of what the lawsuit said: GLBL was supposed to pay SUNE $231 million for a down payment on assets in India. These projects were to be completed and then passed down to GLBL (the Yieldco). Suddenly there was an absence of leadership in GLBL and in the interim Wuebbels stepped up and pushed GLBL's board to approve and send the $231 million quickly. $150 million was transferred to SUNE immediately and it has come out that SUNE used that money to pay a $150 million bill that was due very soon.

In response, bears say that this move shows SUNE's reported liquidity (as shown in their cash walk in January) is actually one big lie. Bulls are mostly silent or long gone at this point.

My Theory:

Perhaps we are making it a bigger deal than it is? If you follow the cash walk you can see that SUNE's transactions are pretty close to one another (one check comes in, one goes right back out). I'm guilty of this myself. I have had to rob Peter to pay Paul just because a bill came due on a Friday and I didn't have a paycheck coming in until Monday. Obviously its not cool to do that on a corporate level, and that's why Wuebbels stepped down.

I could be very, very wrong. All I'm saying is that perhaps this is not a glimpse into a massive fraudulent hole in SUNE's books and instead just a negative result of SUNE living paycheck to paycheck. We already know that SUNE's accounting is extremely complicated, and...