What: Shares of yieldco TerraForm Power Inc. (NASDAQ:TERP) were up about 14% near the end of Friday trading on Wall Street after getting another vote of approval from an investor.
So what: Appaloosa Management, a hedge fund run by billionaire David Tepper, has increased its stake in TerraForm Power from 9.5% at the end of 2015 to 10.88%. Tepper has been prodding for changes at the SunEdison yieldco since late last year, when he bought a large stake in it. Earlier this week, he pushed for the removal of executives who also had a relationship with SunEdison. Shortly thereafter, CEO Brian Wuebbels, who was SunEdison's former CFO, resigned as CEO of TerraForm Power.
Now what: Tepper's activism is clearly having an effect on TerraForm Power, and his purchase of additional shares is a further vote of confidence in the company's long-term value. If TerraForm Power can gain its independence and begin making more prudent acquisitions, it could be a great dividend stock for investors.
There are still a lot of questions to be answered, especially if sponsor SunEdison goes bankrupt, but having an investor with a strong record like Tepper on your side can't be a bad thing.
Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.