Title: Maxeon Solar experiences a drop following Q1 loss; main shareholder plans to increase stake above 50%

Content: The value of Maxeon Solar took a hit after reporting a loss for Q1. Meanwhile, the principal shareholder intends to raise their stake to more than 50%.

In Thursday’s trading, Maxeon Solar Technologies (NASDAQ:MAXN) fell by 36.4%, reaching an all-time intraday low of $1.45, a drop of as much as 53%. This follows the report of a Q1 loss that was larger than anticipated and a 41% Y/Y drop in revenues to $187.5M. The company also provided a Q2 revenue guidance that was below consensus.

There was a shift from a profit of $53.6M in the same quarter last year to a Q1 loss of $14.8M this year. Additionally, there was a 37% Y/Y decrease in shipments to 488 MW from 774 MW the previous year.

For Q2, Maxeon (MAXN) projected revenues of $160M-$200M, falling short of the $271.2M analyst consensus estimate. It also predicted an adjusted EBITDA loss of $31M-$51M, compared to the consensus loss of $15.6M.

According to CEO Bill Mulligan, Maxeon (MAXN) “has been navigating a challenging market environment since the third quarter of last year, with difficult industry pricing conditions and disruptions in demand in our [distributed generation] business due to higher interest rates and policy shifts.”

The CEO further stated that Maxeon (MAXN) requires more capital to maintain operations, leading to TCL Zhonghuan Renewable Energy, the company’s largest shareholder, agreeing to a debt investment in Maxeon (MAXN) of $97.5M and committing to an additional equity investment of $100M. This will increase TCL Zhonghuan’s ownership from the current 22.4% to at least 50.1%.

Mulligan warned that “these transactions will lead to significant dilution for existing public shareholders, with TZE eventually becoming a controlling shareholder.”

Maxeon (MAXN) also announced the termination of a solar module supply agreement with Origis Procurement due to a contract breach for not buying agreed quantities, a claim that Origis disputes.