Hayden White
Long-term horizon, tech, solar, small-cap

Shining Light On The Valuation Of SunEdison's Transformational 'PV' Retention Business Model

For some time now, SunEdison has been extolling the virtues of a transformational shift that it is making to its business model. The strategic shift, however, is a bold one that the market may not yet fully appreciate, even though SunEdison has spent considerable time explaining it.

Starting in 2013, SunEdison began to tout the benefits of shifting away from its historic business model of developing and selling solar projects. CFO Brian Wuebbels described this transition as a move from a strictly "gross margin game," one in which SunEdison had previously sold solar projects to customers, recorded their sale, and allowed those revenues to flow through P&L, to what he calls a "retained value game." Under the retained value model,...

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