SunPower Shares Crash Nearly 40% On Work Stoppage

SunPower Corp. has suspended new solar installations and halted shipments, causing its stock to plunge by nearly 40% in afternoon trading. The solar company informed dealers that starting September 17, it will not support new leases, power purchase agreements (PPA) sales, or new project installations. This decision, outlined in a letter included in a research note from Roth MKM, signals severe operational challenges for SunPower.

Analysts and market observers reacted sharply to the announcement. Pol Lezcano, an analyst with BloombergNEF, remarked, "They are essentially saying that they're not able to continue operations." This sentiment was echoed by Roth analyst Philip Shen, who noted that the company might have "hit a wall."

SunPower's shares dropped by as much as 38%, trading at $1.48, marking one of the worst performances on the Nasdaq Composite for the day. This drastic fall adds to the company's already significant market value loss this year, driven by a downturn in the rooftop solar sector and internal difficulties.

The company's communication highlighted ongoing efforts to address its financial struggles. "We continue to dedicate our attention to address our financial position and are actively working to navigate our current challenges," SunPower stated in an email. However, analysts at JPMorgan Chase & Co. expressed doubts about a quick resolution. "We do not believe this is a temporary halt, but rather an indefinite suspension of SPWR's future dealings," wrote analysts led by Mark Strouse.

The suspension follows a series of financial and operational setbacks for SunPower. In April, the company announced it needed to revise nearly two years of financial results. This was followed by leadership changes, including the replacement of its CEO and COO, and a default on a credit agreement in late 2023 after revising its earnings. Additionally, SunPower has been hit hard by an installation slump in California, the largest solar market in the United States.

French energy giant TotalEnergies SE, which owns about 65% of SunPower, now faces the repercussions of these developments. Analyst Pol Lezcano highlighted the gravity of the situation, stating, "This is their bread and butter. It looks pretty bad."

The future of SunPower remains uncertain as it grapples with these challenges, and the impact on the broader solar industry is yet to be fully realized.

By Julianne Geiger for Oilprice.com

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