Why Suntech Power's Stock Jumped Today

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Suntech Power (NASDAQOTH: STPFQ  ) jumped as much as 13.5% in early trading today after the company got an offer to buy assets.

So what: Shunfeng Photovoltaic International (potentially with the help of GCL Poly) has made a bid to buy the insolvent subsidiary Wuxi Suntech Power, which owns most of the company's manufacturing operations. The company put a deposit of $82 million down, but it's unclear from early reports exactly what price will be paid for the assets. The Wuxi Suntech subsidiary has $1.75 billion in debt, and it's unlikely a sale would be for more than pennies on the dollar, leaving equity holders with nothing. 

Now what: Suntech has been trying to restructure for months, and this appears to be the first major bid to buy the company's most important assets. What investors need to keep in mind here is that shareholders are last in line for any money from selling assets. Chinese banks are owed billions in debt and, then, U.S. bondholders have a claim. Stockholders are last in line and, when it's all said and done, I doubt there will be anything left to fight over. In other words, this stock isn't worth buying today.

Interested in more info on Suntech Power? Add it to your watchlist by clicking here.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2675612, ~/Articles/ArticleHandler.aspx, 5/4/2016 1:55:31 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Travis Hoium

Travis Hoium has been writing for since July 2010 and covers the solar industry, renewable energy, and gaming stocks among other things.

Today's Market

updated Moments ago Sponsored by:
DOW 17,647.54 -103.37 -0.58%
S&P 500 2,049.47 -13.90 -0.67%
NASD 4,724.17 -39.06 -0.82%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
STPFQ $0.00 Down +0.00 +0.00%
Suntech Power Hold… CAPS Rating: *