T1 Energy Inc. (NYSE:TE) experienced a sharp decline in midday trading on Tuesday, with shares dropping $1.44 to $7.21, a 16.6% decrease from Monday's close. The broader solar sector also faced headwinds, as the Invesco Solar ETF (NYSEARCA:TAN) slipped 4.8% to $54.76.
Warrant Expiration Overhang
The primary catalyst for the sell-off appears to be the impending expiration of approximately 24.6 million public and private warrants on July 9. These warrants, exercisable at $11.50 per share, are currently deep out of the money, with the stock trading 37.3% below that strike price. The company had disclosed 14.8 million public and 9.8 million private warrants outstanding as of March 31, according to a June 29 filing.
Director RSUs Add Supply
Adding to the supply pressure, six Form 4 filings on July 6 revealed restricted stock unit (RSU) awards to directors. Five directors each received 22,695 RSUs, while Robert O. Hammond received a larger grant of 33,375 RSUs. The total of 146,850 RSUs were granted on July 2 at $0 and vest on the earlier of one year or the 2027 annual meeting. At Monday's closing price of $8.65, these RSUs were valued at approximately $1.27 million, but at Tuesday's prices, the value dropped to around $1.06 million.
Financial and Operational Context
T1 Energy remains focused on its capital-intensive solar cell manufacturing buildout. The company estimated in May that it needs an additional $225 million to complete the first 2.1-GW phase of its G2_Austin solar cell plant, following the sale of convertible notes in April. The company targets initial cell output at G2_Austin in the fourth quarter of 2026.
CEO Dan Barcelo previously stated the company was "focused on hitting key construction milestones" and working toward a comprehensive financing package. T1 Energy reported first-quarter adjusted EBITDA of $9.1 million and a net loss attributable to common stockholders of $21.4 million.
Sector and Market Conditions
The broader market remained relatively flat, with the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) down just 0.3%. However, the solar sector faced specific pressure, as reflected in TAN's decline. The stock's volume surged to 25.4 million shares, indicating heightened investor activity around the warrant expiration.
T1 Energy's common stock will continue trading on the NYSE under the ticker "TE" after the warrants cease trading as "TE WS" before the market opens on July 9.
