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Why SunEdison Inc.'s Shares Surged 29% Higher Today

By Travis Hoium - Mar 4, 2016 at 12:11PM

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At least one court battle appears to be behind SunEdison Inc.

Image source: SunEdison.

What: Shares of SunEdison Inc. (SUNEQ) jumped as much as 29% today after reaching a settlement on a lawsuit.

So what: SunEdison announced this morning that it has reached a settlement over a lawsuit from Latin America Power Holding, a company it was supposed to acquire before backing out. Latin America Power will get $28.5 million to drop all lawsuits and TerraForm Power will not pay anything as part of the agreement.  

This lifts one cloud over SunEdison because Latin America Power's lawsuit put another potential liability on an already stressed balance sheet.

Now what: Fundamentally, this doesn't change SunEdison's future and only takes one distraction off the table. The bigger concerns should be the delayed 2015 Securities and Exchange Commission filing that would show the company's finances and the deteriorating balance sheet.

This stock seems to pop or drop every day, and until we see evidence that SunEdison can run a sustainable business that makes a profit, I'll remain skeptical about its future.

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