Sunedison Inc Tanks On TerraForm Global Inc Premier

Sunedison Inc (SUNE) is sharply lower today, after yieldco TerraForm Global Inc's (GLBL) disappointing premier

by Karee Venema

Published on Jul 31, 2015 at 2:41 PM
Updated on Jun 24, 2020 at 10:16 AM

While many around Wall Street are digesting news that one exclusive fitness firm filed papers to go public, others are keeping a close eye on alternative energy issue TerraForm Global Inc (NASDAQ:GLBL), which began trading on the Nasdaq today below its IPO price. In fact, at last check, the stock was lingering near $14.32, after being initially priced at $15 per share.

One group that's more than likely paying particular attention to GLBL's price action is Sunedison Inc (NYSE:SUNE) shareholders. Specifically, GLBL is SUNE's yieldco, and due to today's disappointing kickoff for the former, shares of the latter are off 8.6% at $23.42.

Longer term, SUNE -- unlike sector peer Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE) -- has done well. Year-to-date, the shares have added 20%. Plus, although the equity has sold off sharply since hitting a six-year high of $33.45 on July 20, SUNE appears to have found a foothold near its 50-week moving average.

Should SUNE resume its uptrend, the stock could receive some help from the numerous skeptics lined up against it. In the options pits, the equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.68 rests in the 64th annual percentile. In other words, puts have been bought to open over calls at a faster-than-usual clip in recent weeks.

Echoing this is SUNE's Schaeffer's put/call open interest ratio (SOIR) of 0.69, which rests just 9 percentage points from a 52-week peak. Simply stated, short-term speculators have rarely been as put-skewed toward the security as they are now.

Additionally, short interest accounts for a lofty 30.3% of the stock's available float. At Sunedison Inc's (NYSE:SUNE) average daily pace of trading, it would take almost eight sessions to cover these bearish bets. From a contrarian perspective, there's plenty of ammunition to fuel SUNE's fire, should it resume its quest for multi-year-high territory.

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