According to foreign media reports, SunPower (SPWR), a household photovoltaic company, opened down more than 41% on Monday, the largest market decline since the company's IPO in the United States in 2011, which may be closely related to a previous announcement by the company.
SunPower recently claimed that it would restate its October financial results and delay the submission of its third-quarter results due to incorrect inventory accounting of its subsidiaries, which was considered a breach of credit agreements, and that creditors could demand immediate payment of $65.3 million (about 466 million yuan) owed.
This means that SunPower "will not have sufficient liquidity to meet its obligations and pay liabilities arising from normal business operations as they fall due." "There is significant doubt about the company's ability to continue as a going concern" if this happens, the company said.
SunPower noted that earlier this month, it received a temporary waiver from its creditors, allowing the company to delay fulfilling its commitments until January 19, 2024. Management is "pursuing additional waivers and evaluating various financing alternatives" to raise cash and address its liquidity needs, the company said. The company had about $116 million in cash and equivalents at the end of the
third quarter.
"While SunPower continues to work with its creditors to reach an agreement on a number of covenant violations, we see that rising credit risk and the possibility of dilution continue to put pressure on the stock price," said Jordan Levy, an analyst at Truist. Considering that the company's inventory is expected to increase in the current quarter, it is expected that the company's cash flow will face further resistance in the short term.
At present, Goldman Sachs has downgraded SunPower to "sell".
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