Bankruptcy Buzz Saws Sunedison Inc (SUNE) in Half

Sunedison Inc (SUNE) is fresh off record lows

by Alex Eppstein

Published on Apr 4, 2016 at 10:41 AM
Updated on Jun 24, 2020 at 10:16 AM

Sunedison Inc (NYSE:SUNE) has lost almost half of its remaining value today to trade at $0.24, after reports over the weekend suggested the solar firm is preparing to file for bankruptcy protection -- echoing previous rumors -- and that it is being sued by its yieldco, TerraForm Power Inc (NASDAQ:TERP), for breach of contract. Also, as the heavily indebted company looks to sell its India assets, it may have a buyer in the form of Adani Group. Against this backdrop, traders both in and out of the options arena are likely cheering SUNE's downfall.

In the options pits, the stock's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands at 1.08 -- outstripping all but 9% of readings taken in the past year. What's more, SUNE's Schaeffer's put/call open interest ratio (SOIR) registers at 1.08, just 4 percentage points from a 12-month put-skewed peak. In other words, speculative players are more put-heavy than usual.

Options traders aren't the only ones betting on SUNE's downfall. During the latest reporting period, short interest on the stock spiked over 12%, and over half its float is currently sold short. Likewise, roughly 73% of analysts rate the shares a "hold" or worse.

If you've been following Sunedison Inc's (NYSE:SUNE) performance on the charts, this skepticism is anything but surprising. Year-over-year, the stock has lost 99% of its value, and earlier touched an all-time low of $0.20.

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