SunPower Stock Is Tumbling: What's Going On?

Zinger Key Points
  • SunPower says it has substantial doubts about its ability to continue as a going concern.
  • Goldman Sachs analyst Brian Lee downgraded SunPower from Neutral to Sell.

SunPower Corp SPWR shares are trading lower Monday after the company said substantial doubt exists about its ability to continue as a going concern.

What To Know: In a new regulatory filing, SunPower said it has substantial doubts about its ability to continue as a going concern and noted that it breached credit agreement terms by delaying the filing of its quarterly financial results.

"Substantial doubt exists about our ability to continue as a going concern and if we are unable to continue our business, our common stock might have little or no value," the company said in a filing. 

"Although our financial statements have been prepared on a going concern basis, unless we obtain a waiver or amendment of the covenant breaches under the Credit Agreement and Atlas Credit Agreement and we are able to raise additional capital, there is a material risk that we will continue to be in breach of our financial covenants under the Credit Agreement and Atlas Credit Agreement, which may cause future events of default under our other existing debt agreements."

The news comes after SunPower said in October that its audit committee determined that the company's full-year 2022 report and quarterly reports from the first and second quarters should no longer be relied upon.

SunPower said the delaying of its financial results for the third quarter could now cause the lender to call for immediate payment of approximately $65.3 million. 

Goldman Sachs analyst Brian Lee downgraded SunPower from Neutral to Sell on Monday and lowered the price target from $5 to $4.

Check This Out: Federal Reserve Official Cautions Markets On Premature Interest Rate Cut Expectations

SPWR Price Action: SunPower shares were down 31.4% at $4.21 at the time of publication, according to Benzinga Pro.

Photo: Michael Pointner from Pixabay.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: NewsPenny StocksSmall CapMoverswhy it's moving
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!