<p>SunEdison’s stock price surged by about 5% in trading on Thursday as a rumor that the billionaire hedge fund manager David Tepper was about to buy a major stake in the renewable energy company.</p>
<p>During an <a href="http://www.cnbc.com/2015/10/30/tepper-believers-of-sunedison-rumor-must-be-high.html">interview today with CNBC’s “Squawk Box</a>,” Tepper denied the SunEdison rumors and suggested that anyone who had believed them must be smoking pot.</p>
<p>“People probably smoke a lot of marijuana out in your viewing audience and people on Twitter, because I don’t understand where stuff comes from,” said Tepper, the founder and president of Appaloosa Management, which has more than $20 billion in assets under management.</p>
<p>SunEdison, the St. Louis, MO-based renewable energy developer, has seen its stock price plunge from above $30 per share in July to about $7.50 per share this week.</p>
<p>The stock price surged late yesterday by 5% reportedly as the result of speculation surrounding a possible investment by Tepper.</p>
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<p>The company has struggled to convince investors that it can sustain growth over the long run. This has become increasingly difficult as concerns mount about overall returns in the sector. The complex accounting practices used by SunEdison have also exacerbated investor concerns about the company’s liquidity, which are arguably overstated. Although the company recently reported receiving a margin call of $152 million on a $410 million loan which has company shares as collateral, SunEdison posted cash as collateral and amended the terms of the agreement such that the triggers are “significantly below the current market price.”</p>
<p>Ironically, a key driver of SunEdison’s problems appears to be a growing lack of confidence among investors in the asset class generally. Although perceptions like these are often contagious and self-reinforcing, they are not necessarily true.</p>
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