GFunkMoneyDog wrote:Here we go again Cate!!! SunEdison who claims to be the largest provider of solar energy is following the foot steps of Solyndra (another bankrupt solar energy company that Obama gave 500 million dollars to) filing for bankruptcy. The tax payers can expect a loss of 3 billion once SunEdison is granted bankruptcy.
When a company (SunEdison) sets itself up to purchase all of the new development and assets of companies producing a particular product (solar energy), and at the same time sets up two high yield investor funds, TerraForm Power & Terra.Form Global (junk bond funds) that it sells its finished it's products for the sole purpose of having those high yield investment funds, reinvest their proceeds back into the company (SunEdison), failure is inevitable.
High yielding (junk) bonds do very well in the beginning as they use new investors moneys to pay high dividends to established investors. Money (investments) flows into the parent company (SunEnergy), allowing it to gobble up assets of companies engaged in developing their product (solar energy). And money (high dividends) flows to established investors of these high yielding investments (junk bonds). Well....at least for awhile.
As fewer investors buy shares, less and less monies come in to pay the higher dividends established shareholders are used to getting and demand. Less and less money is available to the parent company (SunEdison) to develop products, or buy the assets of other companies (their competitors) producing solar products. At the end of the day, late investors see the value of their shared drop and keep dropping as analyst come out with reports showing SunEdison is selling off assets to keep afloat. The pull out begins and ends with a bankruptcy.
Now if SunEdison had been interested in developing solar energy at a price competitive with the market, it would have balanced it's appetite for buying up companies developing solar products, with investing in R & D to develop it's own products to compete fairly. But that's not what Wall Street scammers do. That's not what Crony Capitalist do.
Common sense should dictate that when a company's history shows it's best finished solar product produces one kilowatt hour that cost $200, and the prevailing market competition (oil & natural gas) products are producing one kilowatt hour at a cost of $35, the company has not been interested in developing a product to effectively compete in the energy market. It's obviously established to benefit Wall Street scammers that create 'investment' tools like junk bonds that pay them big money until......it's exposed and doesn't. Mark one up for Crony Capitalism.