TerraForm Global, Inc.
Robbins Arroyo LLP: TerraForm Global, Inc. (GLBL) Misled Shareholders According to a Recently Filed Class Action
Shareholder rights law firm Robbins Arroyo LLP announces that a class action complaint was filed in the Superior Court of the State of California for the County of San Mateo. The complaint alleges that officers and directors of TerraForm Global, Inc. (NASDAQGS: GLBL) filed a misleading Registration Statement and Prospectus in connection with the company’s initial public offering (“IPO”) on July 31, 2015. TerraForm Global, a subsidiary of SunEdison, Inc., owns and operates renewable energy generation assets worldwide.
TerraForm Global Files Misleading Registration Statement
According to the complaint, TerraForm Global’s close financial and operational relationship with SunEdison made the company particularly sensitive to SunEdison’s business performance. The complaint alleges that TerraForm Global’s Registration Statement was therefore misleading because it failed to state that SunEdison was about to report disappointing financial results that fell far below analyst expectations, and that TerraForm Global’s business prospects would be negatively affected by SunEdison’s poor performance. Further, the Registration Statement did not disclose that SunEdison was limiting distribution of assets to TerraForm Global, and, in turn, TerraForm Global would not achieve the degree of growth necessary to sustain the dividend yield promised to investors.
On August 4, 2015, TerraForm Global filed its Prospectus with the U.S. Securities and Exchange Commission. In its IPO, the company sold 45 million shares of Class A common stock at an offering price of $15 per share. The proceeds from the IPO were purportedly to be used to repay outstanding debt, fund pending acquisitions, repay project-level debt, and advance general corporate purposes.
Then, on August 6, 2015, SunEdison issued a press release disclosing its second quarter 2015 financial results, reporting a loss of $0.93 per share compared to analyst estimates of a $0.55 per share loss. On this news, TerraForm Global’s stock declined $2.39 per share, or 17.4%, to close at $11.27 per share on August 6, 2015. Then, on October 7, 2015, SunEdison revealed that it was significantly reducing its workforce by up to 15%, and indicated a slowdown in the acquisition of energy generating assets, including solar and wind assets. On October 22, 2015, the company’s shares closed at $7.94 for a cumulative loss of more than $7 per share since the July 31, 2015 IPO.
TerraForm Global Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.