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Why SunEdison is Up 20 Percent Thursday (SUNE)

Solar Decathlon 2011Shares of SunEdison (NYSE: SUNE) are up more than 20 percent in early trading Thursday after the company announced that if would spin off its semiconductor business in an IPO in order to generate revenue to fund it’s solar business.

SunEdison announced that the new company, SunEdison Semiconductor would operate as an independent company with a new board of directors and expects it to IPO in early 2014.

“Today’s announcement represents the next evolution in our strategic plan to better position both our solar and semiconductor businesses for sustainable, long-term success,” said Ahmad Chatila, Chief Executive Officer of SunEdison. “This new structure will allow each independent company to pursue its shareholder value generating strategies, focus on key markets and customers, optimize capital structures, and enhance access to growth capital for each company in the years ahead.  Given the significant accomplishments of the businesses to date, it is the right time for this transaction which we believe maximizes value to our investors while benefiting our customers and employees.”

SunEdison is a $1.87 billion company with an average trading volume of around 5 million shares. Year to date, the company is up 98 percent despite a more than 30 percent sell off that took place at the beginning of August.


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Disclosure: At the time of this writing, the author had no position in the company mentioned.

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