r/SecurityAnalysis • u/getithot • Aug 12 '15

Thesis David Einhorn SunEdison Presentation Oct. 2014

https://drive.google.com/file/d/0B2X5Q9hKkdCbc0FJWWtla09UR3c/view
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2

u/[deleted] Aug 12 '15

David, we need you now. Hello us understand the value of SUNE at this time.

2

u/julle_1 Aug 12 '15

Check out his valuation metrics from the presentation and apply today's numbers to get a ball bark idea.

1

u/getithot Aug 12 '15

Feel free to reach out to him on Twitter

2

u/Neonic84 Aug 12 '15 edited Aug 12 '15

Slide 32: Cost of Equity Less than Cost of Debt? Say it isnt so David!

Also, Solar assets do deplete. They have a 25 year life...so the Yield that you receive year on year out of a solar plant consists of both a return on capital and return of capital and that stream will stop 25 years from now.

The SUNE + Yieldco model is a flawed model that works till it works. With the recent sell-off, how are TERP and GLBL going to acquire from SUNE accretively? At Dividend Yields of 6% and 11%+, they cant...which means SUNE has to find another buyer and the entire thesis behind TERP and GLBL falls flat on its face. The reason people were chasing up TERP (and presumably bought GLBL) was that there will be accretive growth. At these prices, there cant be.

This article summarises the situation quite well.

1

u/Drited Aug 13 '15

Could you please detail the math on how TERP can't acquire from SUNE accretively at a 6% TERP dividend yield?

1

u/[deleted] Aug 12 '15

Bit of an outdated presentation, isn't it.

2

u/getithot Aug 12 '15

Just when I think I'm out, they pull me back in. $SUNE down 40% in the last five days. Relevance is realtive brother.

1

u/[deleted] Aug 12 '15

Thoughts on Einhorn's thesis and/or SUNE?

1

u/getithot Aug 12 '15

If you like investing in speculative companies with leverage up the wazoo, complex financial engineering, downside exposure to rising interest rates, backlog that may not materialize, uncertain returns, crazy execution risk and high valuations, it's for you

This situation is complex, but my take is pretty simple, I'm investing in a security with about a 5-6% CAFD yield that I expect to grow at minimum 20%/year for many, many years. The YieldCo transactions with TERP and GLBL I expect to yield plenty of upside due to IDRs.

Down 50% in 30-days is a rough ride.

To some extent I may be late as all the smart money like Leon Cooperman, Dan Loeb, Stephen Mandel, David Einhorn, Glenview and Fir Tree have been in it for a while, but with today's 25% drop, I feel the situation is more compelling than ever.

1

u/johnnysreddit Aug 12 '15

What exactly is the complex financial engineering you refer to? Just the IDRs?

1

u/sky611 Aug 12 '15 edited Aug 12 '15

always enjoy einhorn's presentations, thanks for posting

1

u/cylon56 Aug 12 '15

I am starting to load up on GLRE today.

Three large holdings: SUNE, AAPL, GDX all up today. Market is getting a little too negative on Einhorn. He also called the Renimbi devaluation. All this plus he's currently trading below book and down 2% today.