{ "docId": "019dd923-622c-750b-8b98-fa7fcd640a8d", "docSlug": "522270211ac4", "documentTitle": "Sunnova Energy International Inc. (NOVA)", "authorId": "54_Spruce_Point_Capital", "authorName": "Spruce Point Capital Management", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2020-09-29 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 37, "pageCount": 91, "prevPage": 36, "nextPage": 38, "slideType": "preempt_rebuttal", "function": "preempt_rebuttal", "density": "overcrowded", "nDataPoints": 4, "notes": "Uses a series of quotes from industry executives to contradict the market's assumption of a favorable policy outcome.", "elementsJson": [ "headline_text", "paragraph", "quote_block" ], "metadataConfidence": 0.95, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b98-fa7fcd640a8d/37", "deckHref": "/decks/019dd923-622c-750b-8b98-fa7fcd640a8d", "deckJsonHref": "/decks/019dd923-622c-750b-8b98-fa7fcd640a8d.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-fa7fcd640a8d#slide-37", "components": [ { "bbox": null, "kind": "callout", "text": "In a highly competitive industry where all players compete for each incremental customer, we find it unlikely for companies to pass through increased costs.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-0398-7399-b323-4815ec6cbd50", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.94, "x": 0.03, "y": 0.18 }, "kind": "paragraph", "text": "Spruce Point believes the recent rise in solar stocks is due to the assumption of a change in Washington D.C. and favorable benefit to the solar industry from a potential Biden administration's policy. Our research has shown mixed views, and nothing showing total certainty, on the possibility of an extension to the solar tax credits. According to Sunrun, a 4% reduction in costs and 2% increase in prices would be required to offset the loss from a runoff in the ITC. In a highly competitive industry where all players compete for each incremental customer, we find it unlikely for companies to pass through increased costs.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "482e5a17-84bf-4051-8037-a07bf6560f4d", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.85, "x": 0.12, "y": 0.89 }, "kind": "quote", "text": "You only have so many levers to make up that delta. You're going to have to be pulling on every lever.", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6574ec5e-eccd-4f98-af37-3b26c4737454", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.85, "x": 0.12, "y": 0.71 }, "kind": "quote", "text": "We would need to do to maintain neutrality on that is to improve costs by about 4% every year and raise pricing by about 2% each year. And so we think that's incredibly doable.", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "74d4aad5-290d-4733-917d-6c83f5efd217", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.11, "w": 0.85, "x": 0.12, "y": 0.57 }, "kind": "quote", "text": "Biden announced the $2 trillion policy and I think people are assuming that's going to directly benefit those companies... I think a lot of what the focus will be under a Biden administration will be offshore wind and energy efficiency.", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "7c104523-0e3e-44ee-a486-793ede0fd84f", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.18, "w": 0.85, "x": 0.12, "y": 0.37 }, "kind": "quote", "text": "You're really in 50/50 land on the federal investment tax credit being extended... I'm on the 50 that says, I don't think it gets renewed... I still don't think it gets extended.", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9e23e465-2b3f-496b-bc34-969944e700a6", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "\"You're really in 50/50 land on the federal investment tax credit being extended... I'm on the 50 that says, I don't think it gets renewed.\" — Senior Solar Industry Executive; \"I think a lot of what the focus will be under a Biden administration will be offshore wind and energy efficiency.\" — Former Sunnova Executive; \"We would need to do to maintain neutrality on that is to improve costs by about 4% every year and raise pricing by about 2% each year.\" — Sunnova CEO Q4 2019 Call Feb 27, 2020; \"You only have so many levers to make up that delta. You're going to have to be pulling on every lever.\" — Industry Executive", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-0398-7399-b323-4decc0ddf2e4", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.3, "x": 0.02, "y": 0.97 }, "kind": "source-note", "text": "Source: Spruce Point research, Earnings call transcripts", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "1b14a0e8-49e8-4d4a-8ae8-0db2e8da53dd", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.65, "x": 0.305, "y": 0.04 }, "kind": "title", "text": "Miscalculating Probability Of ITC Extension", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "66c1a847-5e12-4123-acee-b913c23f6854", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "preempt_rebuttal", "slug": null, "matchId": "b066eb73-2f2b-46a8-9c76-eed99957ff7e", "evidence": "Uses expert quotes to undermine the market's bullish thesis on ITC extension.", "confidence": 0.9 } ], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }