Two years ago, it was touted as one of the strongest solar outfits in the world.
Today, it’s become a lesson on how to destroy a company.
Last year, SunEdison (NYSE: SUNE) traded as high as $33.45.
Today, it hit a new low of $0.50. This, after news of a likely bankruptcy was on the way.
Of course, the demise of SunEdison has been well underway for some time now.
After taking on more debt than a drunken rapper on a video shoot, SunEdison fell victim to bad decisions and a management team that was wildly arrogant and incompetent. And this is unfortunate, as SunEdison was once a quality operation.
Management Error
Watching the destruction of SunEdison has served as a very valuable reminder of the importance of a top notch management team. Especially in the solar space, where there’s no room for management error.
Truth is, there really are only a handful of solar companies being run by the right people. Some of these include: SunPower (NASDAQ: SPWR), First Solar (NASDAQ: FSLR), and SolarEdge (NASDAQ: SEDG).
As a side note, companies like SunPower and First Solar will ultimately benefit from the disappearance of a once-major player like SunEdison. While I don’t wish any ill will on SunEdison, the truth is, with it out of the line-up, SunPower and First Solar will certainly pick up some of the slack.
Near-term, the fallout from SunEdison could cast a shadow over the broader solar market, but I wouldn’t let that dissuade you from staying long on solar, or renewables in general. Especially considering the continued investment we’re seeing in the renewable energy space.
Big Money Loves Solar
According to the latest Global Trends in Renewable Energy Investment report, published by the UN Environment Programme, global investment in new renewable energy capacity in 2015 was $266 billion. That’s more than double the roughly $130 billion that was invested in the coal and gas space.
Check it out …
The report also found that renewable energy investments in the developing world were greater than renewable energy investments in the developed world.
This is particularly good news for pollution-choked economies in China and India. It’s also wonderful news for certain parts of Africa and the Middle East where fossil fuel-based infrastructures don’t even exist – and thus, will never have to exist thanks to the rapid proliferation of renewable energy technologies.
Good stuff!
