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The share price fell 40%, a new low! SunPower (SPWR.US) announced the suspension of PV new equipment installation and delivery.

AInvestThursday, Jul 18, 2024 10:40 pm ET
1min read

According to a letter from SunPower (SPWR.US), the company told its distributors that it would no longer support new equipment installations and stop shipments. The stock of SunPower fell nearly 40% to $1.51 on Thursday, making it the second worst performer in the NASDAQ Composite Index. The stock has fallen more than two-thirds this year due to the decline in the rooftop solar industry and internal issues. “They are basically saying they can’t continue to operate,” said Pol Lezcano, an analyst at Pengbo Research, in an interview.

In a letter from Roth MKM, the company told distributors that it “will no longer support new lease and power purchase agreements sales, nor new project installations” starting on September 17; all new shipments and project installations will be stopped. The company “may have hit a wall,” Philip Shen, an analyst at Roth, wrote in a Thursday note.

In an email, the company said: “We will continue to focus on resolving our financial situation and proactively address the current challenges.” SunPower confirmed the contents of the letter Mr. Shen cited.

It is unclear how long the halt in installations will last, and JPMorgan analysts said it might not be resolved soon. “We believe this is not a temporary pause, but an indefinite pause of future SunPower transactions,” said analysts led by Mark Strouse in a note.

The company had already indicated in April that it needed to review its financial performance over the past two years. It also replaced its chief executive and chief operating officer, and defaulted on a credit agreement in late 2023 after a revenue revision, amid a slowdown in installations in California, its home state and the largest solar market in the United States.

France’s energy giant TotalEnergies (TE.US) owns about 65 percent of SunPower. The company’s decision to stop making panels shows that its problems are deepening, Mr. Lezcano said.

GLJ Research analyst Gordon Johnson also downgraded SunPower to “sell” and cut its target price to zero from $1.61.

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