) divested semiconductor business, SunEdison Semiconductor Ltd.,
debuted on Nasdaq Global Select Market on May 22, 2014, with the
ticker symbol 'SEMI.'
SunEdison Semiconductor had offered 7.2 million shares at $13.00
per share and raised approximately $93.6 million with the IPO. The
company's shares touched a high of $16.04 on the day and settled at
$15.00 at the end of the trading session. On Friday's trade, shares
of SEMI were up 3.7%.
A division of Samsung had already committed to spend up to $100
million to purchase additional shares in SEMI. Business Journal
reported that the number of shares Samsung is buying is in fact
$7.1 million, which at the IPO price comes to about $92.3
SunEdison Semiconductor manufactures silicon wafers for the
semiconductor industry and lists
Taiwan Semiconductor Manufacturing Co.
) and Samsung as its customers.
SunEdison decided to divest its semiconductor business in order
to focus on its core solar power business. The decision was also
prompted by the lower-than-expected demand for its semiconductor
It is worth noting that SunEdison reported an 11.3%
year-over-year decline in revenues from its semiconductor business
in the last-reported quarter. At the same time, the solar business
did exceptionally well, growing 86.8%.
Solar project sales have picked up due to increased PV
installations across the U.S., China, Japan, India, Middle East,
Africa, Latin America, Australia and Southeast Asia. The surge in
demand from these regions could mitigate lower demand in Europe,
thus helping the global solar industry grow.
Though SunEdison's growing exposure to the solar energy market
is encouraging, project development requires considerable time and
investments. Hence, any delay or inability in selling these
projects at desired prices could have an impact on liquidity.
Moreover, SunEdison has a highly leveraged balance sheet. The
company exited the first quarter with cash, cash equivalents and
restricted cash of $526.6 million compared with $643.6 million in
the previous quarter. Long-term debt (excluding current portion)
was $3.49 billion.
Currently, SunEdison has a Zacks Rank #3 (Hold). A better-ranked
stock worth considering is
) , which sports a Zacks Rank #2 (Buy).
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