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Why SunPower and Maxeon Solar Stocks Both Popped Today

By Rich Smith – Aug 27, 2020 at 4:07PM

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Investors seem to think SunPower and Maxeon will perform better separately than together.

What happened

Today is a big day for solar power, as solar panel installer SunPower (SPWR 0.14%) begins its life independent from the division that used to manufacture the solar panels it installs, which is now known as Maxeon Solar Technologies (NASDAQ: MAXNV). At the close on Thursday, shares of SunPower were up almost 24% while Maxeon was up 16.2%.

Stock up arrow rising over 2020

Image source: Getty Images.

So what

But SunPower stock was listed as trading higher today even though its price was lower than its Wednesday close. So logically, the stock should have been down 20% -- albeit for a very good reason. Logically, yes. But these are the kinds of results you sometimes run into when a company spins off one of its divisions.

SunPower executed its long-awaited spinoff of Maxeon Solar Technologies this morning. Maxeon will carry on manufacturing solar panels, while SunPower will focus on installing solar panels and battery storage systems in residential and commercial buildings.

As SunPower CEO Tom Werner explained it, the move will permit "both SunPower and Maxeon to invest in key programs to drive their future profitable growth," focusing on their respective "areas of specialization, technology innovation, and economies of scale."  

Now what

And that's what investors should be focusing on today: whether these two solar companies will become better businesses separately than they were together. For one Motley Fool contributor's view on the chances of that happening, read this.

Rich Smith 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.

Stocks Mentioned

SunPower Stock Quote
SunPower
SPWR
$22.24 (0.14%) $0.03

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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