Sunedison Inc Smacks TerraForm Power Inc

TerraForm Power Inc (NASDAQ:TERP) has once again delayed filing its annual financial statements

Mar 16, 2016 at 11:36 AM
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Sunedison Inc (NYSE:SUNE) yieldco TerraForm Power Inc (NASDAQ:TERP) is falling, after the company once again delayed filing its annual report -- and received a delisting notice from Nasdaq as a result. In late February, the firm put off filing its 10-K, requesting additional time "to complete all steps and tasks necessary to finalize [the] annual financial statements." The latest move may have something to do with a similar request by struggling SUNE. Regardless, shares of TERP are down 4.5% at $10.07, and puts are crossing the tape at an accelerated pace.

More broadly speaking, option traders have shown a preference for long calls over puts on lightly traded TERP. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for instance, speculative players have bought to open 3.21 calls for every put over the past 10 sessions.

Echoing this call-skewed backdrop is TERP's Schaeffer's put/call open interest ratio (SOIR) of 0.57. Not only does this show that calls nearly double puts among options expiring in three months or less, but it sits in the 23rd annual percentile. In other words, short-term speculators are more call-heavy than usual.

Outside of the options pits, however, sentiment is more skeptical. In fact, 26.1% of TERP's float is sold short, representing 5.2 times the average daily trading volume. As such, it's entirely possible some of the recent call buying is a result of short sellers hedging their bearish bets.

Technically, today's negative price action is just more of the same for TERP. Since hitting a record high of $42.66 last April, shares of TERP are down over 76%. What's more, the shares continue to struggle under the weight of their 20-week moving average -- a trendline not conquered on a weekly closing basis since last July.

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