SolarEdge Technologies, an American solar equipment manufacturer, announced on Tuesday (June 25th) that one of its clients has filed for bankruptcy protection and may not be able to repay its $10 million debt. Subsequently, SolarEdge's stock price plummeted by 20%.
SolarEdge wrote in a document submitted to the US Securities and Exchange Commission (SEC) that Arizona's solar panel installer PM& M Electric owes the company $11.4 million and is currently seeking bankruptcy protection.
The document points out that PM&M cannot guarantee the outcome of the bankruptcy proceedings, so SolarEdge may not be able to receive this outstanding payment in the end, or it may only be collected after significant delay.
In the same document, SolarEdge also pointed out that it expects the company's self use cash flow to flow out $150 million in the second quarter, mainly due to certain discretionary minority equity investments, credit extensions to certain customers, higher than expected operating funds related to US manufacturing growth, and a slowdown in accounts receivable payments.
In addition, the company also stated that it will sell $300 million of convertible senior notes due in 2029. The company plans to use this funds to pay for price limit bullish transactions, repay previous debts, and for general corporate purposes.
This document reflects more uncertainty and risk factors for the company. Affected by this incident, the company's stock price closed down more than 20% on Tuesday (June 25th) and closed at $26.40 on the US stock market.
With the latest stock price performance, June this year has become the worst monthly performance in the company's history, with a cumulative decline of 48%. Since the beginning of this year, the cumulative decline of the company has reached 73%.
Several research companies also released reports on SolarEdge a month ago, which were generally positive, at least not too pessimistic; But I didn't expect the company's fundamentals to collapse in just one month. For example, Mizuho recently lowered the target price of SolarEdge stock from $104.00 to $84.00 and set a "buy" rating for the company; BMO Capital Markets has lowered SolarEdge's target price from $73.00 to $56.00 and rated the stock as "on par with the market"; Barclays Bank has raised the target price of SolarEdge from $50.00 to $61.00.
As SolarEdge's stock price plummeted on Tuesday, US photovoltaic stocks generally fell. Sunnova Energy fell 5.5%, Daquan New Energy ADR fell by about 8.2%, Jinko Energy ADR fell by more than 7.7%, photovoltaic inverter supplier Phase Energy fell by more than 5.7%, Maxeon Photovoltaic Technology fell by more than 5.1%, Sunrun fell by more than 4.5%, Atlas Solar ADR fell by more than 4.3%, and SunPower fell by about 4%.