SunEdison, Inc.
Thesis
The investor discussed buying calls on SunEdison, believing the market was mispricing the options and that the stock had potential if it did not go bankrupt, as it could represent a long-term investment opportunity.
Did it work?
failed
confidence: high
The long call thesis was explicitly conditional on SunEdison avoiding bankruptcy, and the company ultimately filed for Chapter 11 in April 2016, decisively breaking the core condition of the pitch. The stock fell 32.5% since the pitch, and because calls are leveraged instruments, the option positions would have suffered losses far worse than the underlying. Both the price direction and the invalidated survival condition confirm the thesis failed regardless of the unknown time elapsed.