Wall Street’s nightmare stock is getting annihilated

Crater lava lake Kilauea
Kilauea Lava Lake Flickr / US Geological Survey

SunEdison is crashing again after the company said that it would delay its 10-K filing so it can finalise its financial statements.

The stock was last trading down more than 30% in the premarket at around $1.37 per share.

Shares of SunEdison have collapsed 80% since last summer.

Here’s the statement (emphasis ours):

State below in reasonable detail the reasons why Forms 10-K, 20-F, 11-K, 10-Q, 10-D, N-SAR, N-CSR or the transition report or portion thereof, could not be filed within the prescribed time period.

SunEdison, Inc. (the “Company”) is unable to timely file its Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (the “Form 10-K”) without unreasonable effort or expense. The Company’s delay in filing the Form 10-K is due principally to:

  • the need to complete all steps and tasks necessary to finalise the Company’s annual financial statements for the periods covered by the Form 10-K and the other disclosures required to be included in that filing; and
  • ongoing inquiries and investigations by the Audit Committee of the Company’s Board of Directors (the “Audit Committee”) and its advisers described below, and the need to complete the inquiries and investigations prior to the finalization of the Company’s annual financial statements for the periods covered by the Form 10-K.

The Audit Committee, advised by independent counsel and with the assistance of accounting and financial advisors, initiated an inquiry in late 2015 based on allegations made by former executives of the Company concerning the accuracy of the Company’s anticipated financial position previously disclosed to the Company’s Board of Directors (the “Board”). The Audit Committee, with input from the Board, has been working diligently with its advisers since late 2015 and as of the date of this filing has found no wrongdoing based on the former executives’ allegations, although this process is still underway. The Audit Committee, mindful of the current challenges faced by the industry and the Company, has also recently initiated an investigation concerning the accuracy of the Company’s anticipated financial position based on certain additional issues raised by a current and a former employee of the Company. The Audit Committee is being advised by its independent counsel, with the assistance of accounting and financial advisors, and is still in the early stages of the investigation and has not yet been able to independently evaluate the merit of such allegations. If some or all of the allegations made by these former executives and current and former employees are determined to have merit, management may be required to reassess the Company’s liquidity position as well as the disclosures in the Form 10-K, including whether the Company may require greater liquidity than previously anticipated and/or whether the sources are sufficient to meet its requirements. The Company has previously disclosed its liquidity position, the risks associated therewith and the potential for the need for additional liquidity sources, in its Form 10-Q for the period ended on September 30, 2015.

The Company is working diligently to prepare and file the Form 10-K, including completing the processes related to such filing and an assessment of the Company’s financial position. The complexity of completing the Company’s Form 10-K has increased compared to the prior year due to the restructuring decisions previously disclosed and the additional turmoil in the energy sector. The Company intends to file the Form 10-K within the 15 calendar day period set forth in Rule 12b-25(b) under the Securities Exchange Act of 1934, as amended. The Company’s independent registered accounting firm, KPMG LLP, will need to (a) complete its audit of the Company’s (i) financial statements contained in the Form 10-K and (ii) internal controls over financial reporting and (b) assess the impact of the findings of the inquiry and investigations once they are completed by the Audit Committee.

The stock is owned by David Einhorn’s Greenlight Capital. The fund own more than 21 million shares, or a 6.64% stake. SunEdison has been one of his fund’s biggest losers.

More to come…

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