Suntech soars on Buffett rumour

Suntech shares erased much of their losses since the company was last month pushed into bankruptcy after a rumour emerged that US mega-investor Warren Buffett is contemplating an acquisition.

Some analysts were quick to point out the apparent illogic of such a takeover – but that did not stop shares of New York-listed Suntech from soaring as much as 28% on 8 April, before closing up nearly 16% to $0.48.

That is the highest share price for Suntech since it announced it was forced into insolvency on 19 March – and represents its biggest one-day increase since December.

Ironically, the ramp-up came as the New York Stock Exchange hit Suntech with a formal warning based on its minimum share price criteria – although that counts as the very least of Suntech's worries at the moment.

The takeover rumour was published by a news service owned by the Hong Kong Economic Times, and cited an unidentified source.

Neither Suntech nor MidAmerican Energy, the energy subsidiary of Buffett’s sprawling Berkshire Hathaway business empire, commented on the rumour.

MidAmerican continues to aggressively expand its renewables portfolio, and particularly PV since entering the solar game in late 2011. In January 2013 it bought two construction-stage PV projects totalling nearly 600MW from SunPower.

Buffett has not suggested he has any appetite for PV manufacturing, and analysts point out that a Suntech takeover would endanger the financial bailout the company is expected to receive from the local Chinese government.

However, with shares across the PV industry near record lows, and signs of a possible industry turnaround beginning to appear, the mere possibility that Buffett was running the rule over Suntech was enough to cheer investors.

Yesterday, market researcher IHS predicted a 35GW market for PV this year, up from 31.7GW last year.

Separately, Trina Solar chairman Jifan Gao said the company – a key Suntech rival – may return to profitability from June, after nearly two years of consecutive losses.