Did you know that there are actually two Valeants? There’s the serial acquirer pharmaceutical company that might be giving Bill Ackman a little false hope right now. And then there’s the “Valeant of solar,” SunEdison, which epithet was intended as a compliment when Jim Cramer bestowed it but now just seems like a cruel joke.
Especially since, bad as things are for the actual Valeant, they’re worse for the Valeant of solar, which is down 98%, has become a penny stock, may be preparing a bankruptcy filing, and is certainly getting some unwanted mail from the SEC and David Tepper. To make matters worse, the Valeant of solar isn’t even enjoying an April Fool’s bounce.
This week, the Wall Street Journal reported that the solar king was being investigated by the Securities and Exchange Commission, which believes the company may have overstated its cash by about $1.3 billion, when it had under $100 million. On Thursday, the CFO of SunEdison, who was also CEO of two of SunEdison’s spinoff companies, brokers TerraForm Global and TerraForm Power (which buy power from developers and sell it to utilities) left abruptly under pressure from another big hedge fund investor, David Tepper of Appaloosa Management. The two sister companies said in a regulatory filing that SunEdison was at “substantial risk of bankruptcy.” Earlier, the Journal reported SunEdison was working on a bankruptcy filing. The company has declined to respond to the bankruptcy reports; on Thursday night, it confirmed it had received an inquiry from the SEC.
David Einhorn’s main hedge fund was unchanged in March, leaving it up 3.3 percent year to date, his firm, Greenlight Capital, told investors in an e-mail obtained by Bloomberg.