Buffett rumor sees Suntech stock surge

Share

Shares in Suntech, whose main Suntech Wuxi unit was forced into insolvency proceedings on March 20, rose as much as 28% on the rumor, eventually closing 16% up.

News of the apparent interest from veteran investor Buffett's MidAmerican Solar company came from an anonymous source in a report by a news agency owned by the Hong Kong Economic Times, and was carried by news agency Bloomberg yesterday after the share price surge.

Interest from MidAmerican would come as a huge change in investment strategy, with Buffett famous for investing in U.S. companies.

Acquiring a manufacturer accused by U.S. rivals of dumping sub cost price panels subsidized by the Chinese government on American soil, would mark a remarkable u-turn in philosophy.

On top of that, Buffett has not become known as the canniest investor of the 20th century by investing in companies with huge debt piles and clearance sale priced products, as MidAmerican's headline grabbing investment in SunPower's Antelope Valley Solar Projects in January underlined.

Although MidAmerican's chief financial officer Patrick Goodman announced in November that the company would target renewables, because of the high value placed on utilities, the US$2 billion to $2.5 billion paid for the world's largest solar project, in California, was invested in an American solar company with a reputation for high efficiency solar modules – the diametric opposite of Suntech, in other words.

And with Suntech watchers predicting the Chinese government will ride to the rescue of the stricken manufacturer in defiance of WTO rules, the chances of Suntech's debt being favorably rescheduled by the People's Republic would recede markedly if Buffet were to be one of the main beneficiaries.

As always in these situations, MidAmerican refused to comment on the speculation, according to Bloomberg.

Suntech today announced it has six months to avoid delisting under New York Stock Exchange (NYSE) rules. A warning notice was sent out, because the company's closing share price was less than $1 for a 30-day trading period up to April 4. To avoid delisting Suntech's closing price has to finish the trading period for a month at $1 or higher and have averaged such a closing price during a 30-day period of the month in question.

Suntech has notified the NYSE of its intention to avoid delisting.

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.

Popular content

Rooftop PV installations could raise daytime temperatures in urban environments by up to 1.5 C

09 October 2024 New research from India shows that rooftop PV system may have "unintended" consequences on temperartures in urban environments. Rooftop arrays, for ex...

Share

Leave a Reply

Please be mindful of our community standards.

Your email address will not be published. Required fields are marked *

By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.

Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.

You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.

Further information on data privacy can be found in our Data Protection Policy.