(Bloomberg) — SunPower Corp. plunged after the solar company told dealers it would no longer support new installations and was halting shipments.
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“They are essentially saying that they’re not able to continue operations,” Pol Lezcano, an analyst with BloombergNEF, said in an interview.
The shares slumped as much as 24% and were trading at $1.94 at 2:07 p.m. in New York, making it one of the day’s worst performers in the Nasdaq Composite. The company has lost more than half its market value this year as it contends with a decline in the rooftop solar industry as well as internal issues.
SunPower notified dealers that as of Sept. 17, it “will no longer be supporting new leases and PPA sales, nor new project installations,” according to a letter that was included in a research note from Roth MKM. “All new shipments and project installations will be halted.”
The company may have “hit a wall,” Roth analyst Philip Shen wrote in the Thursday note.
“We continue to dedicate our attention to address our financial position and are actively working to navigate our current challenges,” the company wrote in an email. SunPower confirmed the content of the letter cited in Shen’s note.
It’s unclear how long the suspension of installations will persist, and JPMorgan Chase & Co. researchers said the situation may not be resolved quickly.
“We do not believe this is a temporary halt, but rather an indefinite suspension of SPWR’s future dealings,” analysts led by Mark Strouse wrote in a research note, referring to the company’s ticker.
The notice comes after the company said in April it needs to restate almost two years of financial results. It also replaced its chief executive officer and chief operating officer, defaulted on a credit agreement in late 2023 after an earlier earnings revision, and is grappling with an installation slump in California — its home state and the country’s biggest solar market.
French energy giant TotalEnergies SE owns about 65% of SunPower. SunPower’s decision to halt activities is an indication the company’s troubles have deepened, Lezcano said.
“This is their bread and butter,” he added. “It looks pretty bad.”
(Updates with comment from JPMorgan analysts in seventh paragraph.)
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