NEW YORK (TheStreet) -- SunEdison (SUNE) stock is falling by 5.02% to $2.65 in early-afternoon trading on Wednesday, as the renewable energy company struggles to close its proposed $1.9 billion acquisition of Vivint Solar (VSLR).
The acquisition was contingent on SunEdison's TerraForm Power (TERP) yieldco's immediate purchase of certain Vivint Solar assets after the deal closed. However, billionaire investor David Tepper's Appaloosa Management sued SunEdison with the hope of preventing the asset purchase by TerraForm Power.
With the deal now in jeopardy, SunEdison might need to find another buyer of the Vivint portfolio or sell other assets to generate the $800 million that TerraForm Power was going to pay, Bloomberg reports.
However, an alternative buyer such as a private equity company would likely pay $108 million less than TerraForm Power would, Patrick Jobin, an analyst at Credit Suisse Group AG, told Bloomberg.
"They are a very motivated seller," Jobin said. "The least bad alternative is for SunEdison to take that loss."
If SunEdison is unable to find another buyer, the company might be forced to sell other assets at a discount, Gordon Johnson, an analyst at Axiom Capital Management, told Bloomberg.
Alternatively, SunEdison could cancel the Vivint deal.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D.
SunEdison's weaknesses include its generally high debt management risk, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
You can view the full analysis from the report here: SUNE
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.SUNE data by YCharts