Why Sunrun and Vivint Solar Stocks Soared Today

What happened

Shares of Sunrun (NASDAQ: RUN) and Vivint Solar (NYSE: VSLR) surged on Tuesday after the two companies agreed to a merger that could create a new solar energy titan. By the close of trading, Sunrun and Vivint Solar's stocks were up 23% and 38%, respectively.

So what

Sunrun is seeking to acquire Vivint Solar in an all-stock deal that values Vivint at $3.2 billion. Vivint's shareholders would receive 0.55 shares of Sunrun stock for each Vivint share they own. 

Solar panels on the roof of a house.

Shares of Sunrun and Vivint Solar rose sharply on Tuesday on news of a potential merger. Image source: Getty Images.

The combined company would be one of the largest home solar and energy services providers in the U.S., with a customer base of roughly 500,000 and more than 3 gigawatts of solar assets. The two companies also believe that together, they'll be able to slash expenses by as much as $90 million annually by reducing redundancies in their supply chains, office branches, and technology.

The deal is expected to close in the fourth quarter, pending shareholder and regulatory approval.

Now what

Climate change is making renewable energy sources more important than ever before. Solar power is one of the most promising technologies in this regard. Yet despite years of strong growth, residential solar represents only about 3% of the electricity generated in the U.S. The industry still has tremendous room for growth, particularly with surveys showing that nearly nine out of 10 Americans are in favor of increased solar power usage. 

If this deal goes through as planned, a combined Sunrun and Vivint would be well positioned to play a leading role in the solar industry's long-term expansion.

10 stocks we like better than Vivint Solar
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Vivint Solar wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks


*Stock Advisor returns as of June 2, 2020


Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.