Bill Gross shocked the financial world when he announced he would be quitting his job as CIO of PIMCO, the $2 trillion California-based asset management firm. This meant that he would be stepping down as manager of the $200 billion PIMCO Total Return Fund.

Analysts speculated that this would mean PIMCO could lose anywhere from tens of billions to hundreds of billions of dollars in client assets.

Of course, this doesn't mean people would be dumping bonds outright. If anything, resulting outflows would be going from PIMCO to some competing bond fund manager.

Gross is expected to have a much smaller influence in the markets as he is now taking over the tiny $12 million Janus Unconstrained Bond Fund.

Regardless money is already moving.

Bloomberg TV's Stephanie Ruhle asked influential hedge fund manager David Tepper what this means. Here's the script:

RUHLE: What does this Bill Gross exit mean for the market?

TEPPER: Nothing. Who cares?

RUHLE: Really?

TEPPER: You saw it the other day. The – the little bit that was done with the corporate markets. He's there. He's here. It's not going to mean that much. Really what means things are fundamentals. So you talk about a day, two days, three days. But long term, it doesn't mean anything. The market is the market. It's bigger than anybody.

Indeed, the bond market hasn't seen too much movement in the days since Gross announced his resignation.

Regarding scale, it's important to keep things in perspective. While the billions and trillions mentioned above seem big, the global financial markets are almost unfathomably big.

Below is a chart of global financial assets. Deutsche Bank estimates it was worth $242 trillion in 2013.

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Billionaire David Tepper, who runs $20 billion distressed debt hedge fund Appaloosa Management, said that he's short the euro during a "best idea" talk at the Robin Hood Investors Conference. 

Tepper also recommended very short-term EU debt, like bonds maturing in 2 to 3 years.

He believes that the European Central Bank will have to loosen monetary policy further and expand its balance sheet in its effort to stimulate the euro zone.

The Robin Hood Conference, which has a stacked line-up of hedge fund heavyweights, is off limits to the media. Business Insider has a source inside the event. 

Tepper also said that you have to get rid of the 500 euro note, according to our source. 

Tepper, who is one of those closely-followed names, has one of the best long-term performance track records in the hedge fund space. He has also been the highest paid fund manager the last two years.

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David Tepper, founder of Appaloosa Management, bought 725,000 shares of Alibaba in the third quarter, according to government filings.

The online retailed was recently spun out of Yahoo and made public in a massive IPO.

Tepper, the highest paid hedge fund manager in 2013 taking home $3.5 billion, also lowered his stake in Apple and Citigroup.

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Hedge fund manager David Tepper will return between $2 and $4 billion to clients this year, according to a report from Institutional Investor Alpha's Stephen Taub.

Taub's report, citing people familiar with the firm, said Tepper will return 10%-20% of client assets at the end of the year.

Tepper started the year with $19.4 billion in assets under management, Taub reports.

The report adds that this is a "somewhat regular occurrence" for Tepper, who seeks to keep am amount of assets under management that, "enables him to trade faster and to maximize returns."

The full report from Institutional Investors can be found here.

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Billionaire hedge-fund manager David Tepper is concerned about the market in 2015.

At a time when most of Wall Street is bullish on stocks next year, the founder of the $20 billion distressed debt hedge fund Appaloosa Management said the market may be overvalued, in a brief email to CNBC. 

"Worldwide money [was] made too easy for where USA fundamentals were in both late 1998 and 2014," Tepper said.

He continued, noting what happened in 1999 is "not exactly the same" but said it was "similar," according to CNBC.

Tech stock valuations soared in 1999 to form the tech bubble that burst in early 2000. What's also similar to the events of 1998 is the Russian currency crisis. Russia defaulted on its debt that year.

"This year rhymes with 1998. Russia goes bad. Easing [is] coming from Europe. Sets up 1999 ... [oops] I mean 2015," he wrote.

Markets continued to rally in trading Tuesday as the S&P and Dow Jones soared to record highs, with the Dow climbing to a record 18,000. A revised report showed that US GDP grew by the most since 2003 in Q3, at 5.0% compared to last month's estimate of 3.9%.

Head to CNBC.com for more.

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David Tepper thinks 2015 is going to be a good year.

In an interivew with CNBC's Melissa Lee, Tepper said the stock market is "fairly valued," but expects that stocks could rise another 8%-10% in 2015. 

Lee asked Tepper how he was positioned against his 70%-80% long positioning from earlier this spring, and Tepper simply responded: "Longer."

Tepper added that, "It's not the time to be careful now. Enjoy the ride."

So Tepper is bullish going into next year and it seems he has positioned his portfolio accordingly. 

Back in May at the SALT Conference, Tepper made headlines when he said that it was "nervous time" in the market. At SALT, Tepper said that it wasn't time to be short, but warned that investors shouldn't be "too frickin' long." 

A month later, Tepper said he wasn't nervous anymore. 

Tepper also told Lee that he is up on the year and up for the month of December, but that his Appaloosa Management hedge fund, which has about $20 billion in assets under management, has trailed the S&P 500 this year. 

Last week in an email to CNBC, Tepper said that he worries 2015 could be a repeat of 1999, citing the collapse in the ruble and the prospect of easier monetary policy from Europe.

SEE ALSO: David Tepper Is Worried We're About To Relive 1999

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Hedge fund giant David Tepper cut his entire stake in Chinese ecommerce site Alibaba as well as his position in Facebook, according to his fund's 13F filing. 

Appaloosa's Q4 13F filing shows that they hold no position in Alibaba. In Q3, he held 725,000 shares, according to that filing.

Alibaba IPO'd back in September. Shares of Alibaba are down about 20% from their all time high. 

Tepper also dumped all of his Facebook shares in Q4. He held 3.58 million shares in Facebook, according to the Q3 13F.  

He also sold all of his Citigroup shares. He had held 8.3 million shares of Citi in Q3. He sold it all in Q4. 

Hedge funds are required to disclose their long equity holdings for each quarter in the 13Fs. They don't have to disclose their shorts. Also, keep in mind, these filings are 45 days old. 

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Hedge fund honcho David Tepper, the founder of $20 billion distressed-debt fund Appaloosa Management, is speaking at the Sohn Conference in New York.

His message to the crowd of investors was short and simple:

"It's kind of hard to fight money. Don't fight the Fed...Now you've got four Feds. Four!... Four Feds going all one way? Good luck.'"

Tepper is one of those closely-followed fund managers who has a tendency to move the market when he speaks. Earlier, we ran into a big fund manager who said he only came to watch Tepper talk.  

The entire talk was about monetary policy. Last November, he said short the euro at the Robin Hood Conference. 

"I said short the euro i think that might of worked out okay, I guess." (It did).

But this talk was less about Europe, and more about China. Back in November, said Tepper, "this country called China was incredibly tight." He pointed out that monetary policy in the US, China, Japan and Europe is easy now.

With China, that means you have to be careful if you think that easing there means the same thing as easing has meant in the US. That's because China is already loaded with debt, and with easing is about to add more. He thinks that could make things whacky — the steady rise in stocks we've seen in the US might not happen in China.

"I won't be too long bonds, or too short stocks," he said. As for commodities, he said he'll tread carefully.

Tepper ended quickly after that. As he pointed out earlier, someone else might need the time.

"I've got 6 minutes and 39 seconds, I could probably sell a couple of those to Bill Ackman, he's going to need them."

The Sohn Conference is attended by more than 2,500 investors. The event raises funds for pediatric cancer research. 

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It’s been a tough month for investors. As of yesterday, roughly half of the stocks in the S&P 500 have fallen into bear markets, with declines greater than 20%. International stock markets have fallen dramatically, with the losses accelerating on the heels of the latest Asian currency “event”.

We’ve seen stuff like this before. There is a worthwhile lesson in considering how a pair of history’s greatest investors have dealt with this kind of thing in the past.

On the surface, Warren Buffett and David Tepper don’t have a lot in common. One runs a diversified conglomerate and reinvests the insurance premiums into both long-term common stock positions and outright acquisitions of great companies. The other manages a hedge fund and aggressively trades in the markets each day.

But they have something in common that is worth considering today: Both Warren Buffett and David Tepper know that volatility is where returns come from and the losses of today set up the outsized gains of tomorrow. They’ve “lost” some money on the way to earning tons of it.

In the summer of 1998, there was a currency crisis that originated in the far east and eventually wound its way around the globe, culminating in the devaluation of the ruble and the blow-up / bailout of the first systemically risky hedge fund in history, Long Term Capital. Both Buffett and Tepper took quite a beating during this so-called “Asian Contagion” event.

As Nick Murray explains, Warren Buffett was down quite a bit that summer.

$6,200,000,000

A very large sum of money, wouldn’t you say? Now what, you ask, does it represent?

It is roughly how much Warren Buffett’s personal shareholdings in his Berkshire Hathaway, Inc. declined in value between July 17 and August 31, 1998. And now for the six billion dollar question. During those forty-five days, how much money did Warren Buffett lose in the stock market?

The answer is, of course, that he didn’t lose anything. Why? That’s simple: he didn’t sell.

Berkshire Hathaway’s “A” shares had dropped in price from roughly $80,000 per share in June to $59,000 by the end of September. These same exact shares just hit a high of $229,000 this year. Buffett knew that while the price may have been changing for his company’s shares, the value that his companies were creating would not be permanently impaired. This allowed him to wait out the ’98 episode rather than reacting to it.

Meanwhile, 1200 miles away from Omaha, David Tepper’s New York-based Appaloosa hedge fund was struggling with the same market environment. He had all the wrong trades on and it went against him severely. As Tepper himself related to us at the SALT Conference, it was a painful episode, despite how quickly things turned around for him:

Tepper tells us his fund has been down 20 percent or more on three different occasions. This includes the episode in 1998, where he was blown out because of the Asian Contagion and subsequent Russian currency devaluation.

Tepper was heavily exposed to emerging markets and Russia, the combination crushed the fund. But then he made it all the way back to Appaloosa’s high water mark within 6 months.

“We did it two more times – people started flooding us with money whenever we were down big because counter-intuitively they knew it was good timing to get in.”

The lesson of 1998 for Tepper was that the massive market drawdowns are the biggest opportunities if you can stick it out. He (and his investors) learned to use these episodes to get even more aggressive. It was a tactic he would famously employ ten years later, during the even more difficult post-Lehman meltdown with Appaloosa down more than 20% from its high watermark.

A million dollars invested with David Tepper in the mid-1990’s would be worth more than $250 million today. These gains would not have come easily for the LP, however. As Tepper once described his strategy, “We’re consistently inconsistent. It’s one of the cornerstones of our success.”

There is an equity risk premium in the markets. Over the long term, stock investors can earn average annual returns that are close to 5% above what they’d be able to earn at the risk-free rate. That’s a huge number when compounded over decades.

But it must be earned the hard way – battling through the worst the markets can throw at us. And, as both Buffett and Tepper can attest, its when stocks are treating us the worst that this premium is right around the corner.

Sources:

The First Casualty of a Bear Market (TRB)

The Apotheosis of David Tepper (TRB)

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Hedge billionaire David Tepper, the founder of $20 billion distressed-debt fund Appaloosa Management, disclosed three new positions during the second quarter. 

He snapped up new positions in Alibaba (1,360,000 shares), Apple (2,518,167 shares) and Mylan (989,528 shares) in the second quarter, according to his fund's 13F filing. 

Those investments have a combined value of close to $500 million, according to Bloomberg data.  

Apple is now one of Tepper's top five long holdings. General Motors remains his biggest long position.

Hedge funds only have to disclose their long equity holdings in 13Fs, which come out 45 days after the end of each quarter. 

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It's August and kids are starting to head back to school.

Before they were masters of the universe, the biggest names on Wall Street were once just regular high-school kids, too.

They were members of sports and academic teams. They entered essay contests, edited the school's literary magazine, and starred in musicals.

We combed through a number of high-school yearbooks and have compiled photos and accomplishments of some of the Street's most recognizable names. Some of them still look the same, while others have drastically improved their hairdos.

We even found Goldman's CEO Lloyd Blankfein in his swim trunks. Enjoy!

In the 1947 Woodrow Wilson High School yearbook, Warren Buffett said he wanted to be a stock broker.

His top lieutenant, Berkshire Hathaway Vice Chairman Charlie Munger, was in the ROTC and a member of the boys' rifle team at Central High School in Omaha, Nebraska.

Energy tycoon T. Boone Pickens played basketball at Amarillo High School in the 1940s.

Hedge fund billionaire David Tepper, the founder of $20 billion distressed-debt fund Appaloosa Management, said on CNBC's "Squawk Box" that he's "not as bullish" as he could be.

"I'm not probably as bullish as I could be, because I have problems with earnings growth. I have problems with multiples. I have problems with all kinds of problems, so I can't really call myself a bull," Tepper said.

He noted that people have high expectations for earnings in 2016.

"I'm going to give a compliment to Cramer," Tepper said, pointing out that Jim Cramer, the "Mad Money" host, has previously suggested folks take cash off the table if they're fully invested.

"That's probably not a bad idea," Tepper said. "If you're the average guy, over time, you won't do well in the stock market. We're not talking about crashes here, massive misvaluations. We're talking about a market that should correct. The question is at what level?"

He noted that if the market fell 20% he would be a buyer.

Tepper's fund fell 1.83% during a volatile August and is now up 11.5% for the year, Reuters reported.

The average hedge fund was down 2.2% in August, according to data from Hedge Fund Research, compared with the S&P 500, which fell 6.2%. The average hedge fund is down 1% so far this year, while the S&P 500 is down about 6.2% year-to-date.

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The market is going to have to show David Tepper a few things before he jumps in with more of his cash.

In an appearance on CNBC's Squawk Box, the billionaire founder of hedge fund Appaloosa Management said that the world is now in a cycle of volatility as economies adjust to a post-financial crisis interest rate regime.

It's not just the US Federal Reserve facing a difficult decision about its raising interest rates for the first time since the global financial crisis. The European Central Bank is at a critical point as well, as is the Bank of Japan.

On top of that, you have China making "policy mistake after policy mistake after policy mistake" in an attempt to transition its economy from one based on investment to one based on domestic consumption. 

"It's good when it's a $1 or $2 trillion economy on a learning curve," Tepper said. "It's kind of bad when they're an $10 trillion to $11 trillion economy on a learning curve and they influence a third of the world's economies."

That said, Tepper doesn't think that this is the end of the world. It's just a new world order.

"We're not talking systematic risk and the end of days like '07, '08 ... we're talking about the market having to come to certain new realities ... and while they're adjusting to those new realities, there will be blood," Tepper finished with a chuckle.

That's when Squawk co-host Andrew Ross Sorkin asked Tepper if there was anywhere in the world "where there's so much blood in the water already that it actually looks good?"

Tepper thought for a second, and then put it like this:

"Here's when I'll tell you. What I like to see is when some of those big stocks with big emerging market components — their P/Es [price earnings ratios] come down. Show me that," he said.

"Show me when hedge funds aren't in these last two years with increased volatility ... and they're out of this last two year range. Show me that.

"Show me when mutual fund cash levels are a little bit higher the way they were the past five years before these last two years. Show me that.

"Show me those things and maybe I'll jump back in the water again. I've got nice bathing suits, I think maybe I'll get a new bathing suit," said Tepper.

The opportunities are going to be there, he said, continuing the metaphor.

"I want to be ready for it ... Because you don't want me to lose my bathing suit."

No. No we do not.

Tepper's fund is up 11.5% for 2015 and lost only 1.83% in August when markets and managers around the world were getting slaughtered.

So we're all safe from him losing his suit for now.

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Hedge fund billionaire David Tepper bought an oceanfront mansion in Sagaponack, New York, in 2010 from Jon Corzine's ex-wife for $43.5 million.

The following summer, Tepper tore down Corzine's former summer home to build a mansion twice the size.

Tepper and Corzine had worked together at Goldman Sachs. Tepper left to set up the hedge fund Appaloosa, which now has about $20 billion in assets under management, after then-CEO Corzine decided against promoting him to partner. 

"You could say there was a little justice in the world,"Tepper told New York Magazine when discussing the renovation plans to the home in 2010.

Tepper's sprawling mansion is now complete.

Aerial photographer Jeff Cully was kind enough to share some photos he took during a recent helicopter ride.

We've included a history of the construction of Tepper's summer abode

Here's what the property looked like in 2012, after Corzine's old home was demolished.

By June 2012, the frame of the house had been built. It was clear that it would be massive.

In January 2013, the construction had made a great deal of progress.

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Hedge fund billionaire David Tepper, the founder of $20 billion distressed-debt fund Appaloosa Management, denied a rumor that he has built a position in SunEdison.

He thinks that people must be smoking a lot of marijuana. 

"Really truly, there must be some really good ganja coming into the country," Tepper told CNBC's Kelly Evans when she asked him if he owned the stock. 

The rumor spread on Thursday afternoon on Twitter and the stock popped. In the interview, Tepper noted that those people tweeting "must be high."

In the premarket, SunEdison's stock was last down 6.1%, or $0.51, at $7.81 per share. 

SunEdison's share price has collapsed more than 57% this year. A number of hedge funds, including Greenlight Capital and Omega Advisors, have gotten hit by the stock's plummet. 

Here's the chart from yesterday where the stock popped:

Here's the chart year-to-date:

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Billionaire hedge fund manager David Tepper sent out a rare public letter to the board of one of his holdings, TerraForm Power, a company that owns and manages solar-energy projects.

Appaloosa, Tepper's fund, holds TerraForm Power stock and senior notes, according to the letter.

TerraForm Power's stock surged 22% in trading on Tuesday on Tepper's disclosure of a position in the company.

The crux of the letter is that Tepper is upset about TerraForm Power's relationship with its parent company, SunEdison, a solar-power manufacturer.

SunEdison created TerraForm Power as a yieldco, a company that buys solar projects from the sponsor company and manages them like an MLP does for oil and gas companies. These deals are called drop-down transactions.

SunEdison stock is down 83% year-to-date. TerraForm Power is down 72% over the same period.

Drop-down transactions

In his letter, Tepper accuses SunEdison of pushing low-grade projects onto TerraForm Power through the drop-down transactions. He also accuses SunEdison of stacking TerraForm Power's management and board with SunEdison loyalists during a shake-up last month.

"Thus, it is obvious that the deterioration in TERP's security prices and credit profile this month results from (among other things): (1) the transmission of financial stress related to its 'Sponsor's' ambitious growth objectives and over-extended financial commitments; and (2) TERP's incomplete and selective disclosures," Tepper wrote.

What's more, Tepper discussed the event that triggered the precipitous fall in SunEdison's stock price in July: its announcement that it would purchase Vivint, a residential solar company.

To Tepper, the deal signaled that SunEdison was moving toward lower-quality assets, ones that would then be passed on to TerraForm Power.

"The July announcement of the acquisition of the Vivint Solar ('VSLR') portfolio of residential rooftop assets marks an unfortunate departure from this business model and appears to serve the sole purpose of promoting SUNE's desire to acquire VSLR's development and operating assets, rather than enhancing the quality and value of TERP's holdings," Tepper wrote.

It should be noted that in October there were rumors circling that Appaloosa owned SunEdison stock.

Tepper told CNBC then that people who thought that "must be high" and that there was "some really good ganja coming into this country."

Read the full letter below:

Attention: Board of Directors

Gentlemen:

We write in respect of Appaloosa Management LP's ("AMLP") holdings of TerraForm Power, Inc. ("TERP") common equity and senior notes. We note with interest this week's announced changes to the TERP management team and Board of Directors. Notwithstanding your explanation in the release, we find that "aligning the company's strategic focus around acquiring projects from its Sponsor" offers little apparent benefit for TERP stakeholders and raises concern for obvious conflicts between the interests of TERP and its "Sponsor", SunEdison ("SUNE").

Until recently, TERP's business purpose was to act as a vehicle to hold and finance a high quality portfolio of fully-developed wind and solar power assets that were supported by long-term power purchase agreements with large, investment-grade corporate counterparties. Isolating these projects within a ring-fenced vehicle made sense for both TERP and SUNE, as the most efficient cost of capital could be obtained by segregating them from the operational, developmental and construction risks of SUNE's main operating businesses.

The July announcement of the acquisition of the Vivint Solar ("VSLR") portfolio of residential rooftop assets marks an unfortunate departure from this business model and appears to serve the sole purpose of promoting SUNE's desire to acquire VSLR's development and operating assets, rather than enhancing the quality and value of TERP's holdings. Indeed, the shift to weaker counterparties (homeowners) and the higher risk profile inherent in these assets (small rooftop panels) also appears to disproportionately benefit the "Sponsor's" incentive distribution right ("lOR") at the expense of significant downside financial risk to TERP. Worse yet, is SUNE's stated intention (revealed through the release of an Interim Agreement between SUNE and TERP) to place 500MW per year of these inferior assets in TERP for the next 5 years.

Disclosure of the precise details of this acquisition plan is long overdue, as well. So too, are the details surrounding the distinct possibility that TERP will be forced to accept a note from SUNE (which is of dubious credit quality and market value) due to a shortfall in the market value of the assets to be delivered in the first leg of the VSLR portfolio transaction relative to the $922 million purchase price (i.e., the "Advanced Amount" mandated under the Summary of the Note Terms in Exhibit E to the Purchase Agreement between SUNE and TERP). Given the erosion in the market value of comparable rooftop operators to VSLR (SunRun and Solar City, for example) the face value of that note will likely need to be considerable (but of suspect worth given the obligor).

The reconfiguration of the lnvenergy transaction announced November 9th is no better for TERP stakeholders and is obviously intended for the sole benefit of SUNE. These modifications will hand off SUNE's responsibility for a $388 million equity warehouse commitment to TERP -- yet another departure from TERP's traditional role of owning permanently-financed, income-producing assets. The investment also strains TERP'S resources and significantly raises its leverage and financial risk profile. In downgrading TERP's debt to a highly-speculative rating of B2, Moody's cited the change in operating arrangement brought about from both the Vivint and lnvenergy transactions, and the inherent financial strain thereof. Greater linkage to the "Sponsor" also figured significantly in Moody's analysis.

Thus, it is obvious that the deterioration in TERP's security prices and credit profile this month results from (among other things): (1) the transmission of financial stress related to its "Sponsor's" ambitious growth objectives and over-extended financial commitments; and (2) TERP's incomplete and selective disclosures. TERP's "reliance on third party acquisitions" has little bearing on either of those factors. We note the advertised increase in the number of independent directors on TERP's board and trust that the Corporate Governance and Conflicts Committee (the "Conflicts Committee") will appropriately investigate these and any other related-party transactions to ensure that they are conducted for the benefit of TERP stakeholders. Recent rumors of discussions between SUNE and VSLR regarding "strategic options" for the proposed merger transaction, if true, may represent an opportunity for the Committee to exercise its independence and relieve the financial pressures on both TERP and its "Sponsor" from this harmful transaction. Such efforts would be strongly supported by Appaloosa.

As previously suggested, substantial further disclosures are incumbent on TERP so that investors can assess the full impact of the pending transactions, the relationship between TERP and its "Sponsor", and the circumstances surrounding the changes in TERP's management and Board. We look forward to such disclosures and stand ready to meet and discuss any of the issues raised by this letter. In the meantime, we expect the Board and the Conflicts Committee to respect and defend the integrity of TERP's corporate identity and the interests of its stakeholders. We reserve all rights accordingly.

Sincerely,

David A. Tepper
President

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David Tepper, founder of the hedge fund Appaloosa Management, has stepped up his public battle with TerraForm Power, a company that owns and manages solar-energy projects.

Appaloosa, which owns 9.5% of TerraForm, sent the company a letter demanding to see all documents related to a deal announced in July in which TerraForm Power's parent company, SunEdison, attempted to purchase Vivint, the second-largest installer of residential solar panels in the US.

Appaloosa wants to see books, minutes, analysis, transaction documents, engagement letters, retention agreements — everything.

The fact that Appaloosa is waging a public battle is really odd. The hedge fund is typically very private.

SunEdison, which makes solar-power devices, financed the deal with debt and by selling $922 million of assets to TerraForm Power.

The market hated the deal, seeing it as a sign that SunEdison was cash-poor. The deal sparked an epic dive in SunEdison's stock, which is down 73% year-to-date.

In Tepper's view, SunEdison sold TerraForm Power crappy assets, which is unfair to shareholders. His fund sent TerraForm Power a letter about this at the end of November. TerraForm Power announced this month that it would improve the deal.

But the improvements are clearly not enough for Tepper and Appaloosa, with SunEdison still locking TerraForm Power into a take-or-pay agreement in which TerraForm has to buy residential solar assets from SunEdison or pay SunEdison a fee.

TerraForm Power's stock is down 1.7% on this news. SunEdison's stock is getting hammered, down 25%.

SEE ALSO: Wall Street's getting crushed by a form of financial engineering you've probably never heard of

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David Tepper is suing SunEdison, the solar manufacturing company that has seen its stock fall 84% over the past year, according to Reuters.

The suit is meant to prevent SunEdison from acquiring assets belonging to Vivint, a residential solar company it plans to acquire.

From there everything gets more complicated.

Tepper is not a shareholder in SunEdison; he is a shareholder in TerraForm Power, one of its two sister companies known as "yieldcos." They were created to manage solar projects built by SunEdison, like a utility.

SunEdison's stock is down 11% and falling.

In December, he wrote a letter to TerraForm Power's board outlining his frustrations at its closeness to the parent company. He believes that SunEdison is using TerraForm Power to hide that it is cash poor.

Specifically he — and the rest of Wall Street for that matter — point to SunEdison's attempt to acquire Vivint, the second-largest residential solar company, back in July. That was the trigger that sent the stock tumbling.

The Vivint deal would force TerraForm Power to buy some assets from Vivint that shareholders believe are over-valued. It's also a move away from SunEdison's usual model of managing and manufacturing products for large-scale projects, not individual homes.

"The July announcement of the acquisition of the Vivint Solar ('VSLR') portfolio of residential rooftop assets marks an unfortunate departure from this business model and appears to serve the sole purpose of promoting SUNE's desire to acquire VSLR's development and operating assets, rather than enhancing the quality and value of TERP's holdings," Tepper wrote in his December letter.

He also demanded to see all the documents surrounding the deal.

It should be noted that in October there were rumors circling that Appaloosa owned SunEdison stock. Tepper told CNBC then that people who believed those rumors "must be high" and that there was "some really good ganja coming into this country."

Last week, SunEdison announced that it was refinancing debt and issuing stock to raise cash to pay down debt. The market hated the announcement. The debt was refinanced at a really high rate, and stock issues diluted existing shareholders.

Basically, a lot of people are unhappy.

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On Tuesday, the market got just a little bit more information about what could happen to embattled solar-energy manufacturer SunEdison in its legal battle against hedge fund billionaire David Tepper.

The Delaware Court of Chancery scheduled a hearing for February 16, and consolidated the Appaloosa proceeding with one brought by the Central Laborers' Pension Fund.

And — as it happens in the natural ebb and flow of Wall Street information — by Wednesday morning the analyst reports on potential outcomes for the company started rolling into inboxes across The Street.

What are they saying? In short, the Tepper lawsuit could make SunEdison's already-precarious cash position downright hazardous. The stock fell as much as 15% on Wednesday before rebounding. At 3 p.m. EST, it was down around 7%.

The story so far ...

SunEdison stock has been in death-drop mode since July, when the company made a play to buy the second-largest residential solar company, Vivint, for $799 million.

The stock has fallen 92% in the last six months. Huge-name investors like Leon Cooperman of Omega Advisors and David Einhorn of Greenlight Capital got scalped.

To Wall Street, the Vivint deal showed that SunEdison was cash poor and dumping overvalued assets on its sister companies, called yieldcos. SunEdison has two yieldcos: TerraForm Power and TerraForm Global. They buy projects from SunEdison and then manage them, kind of like any energy utility.

As the Vivint deal stands now, when it's done TerraForm Power will have to buy $922 million worth of Vivint assets, in what's called a take-or-pay agreement, and take on $960 million of its debt.

Tepper, who has a stake in TerraForm Power but not SunEdison, is trying to get an injunction to stop this portion of the deal.

The fallout

If Tepper succeeds, according to Credit Suisse analysts, SunEdison's already-weak cash position will get way worse.

Credit Suisse wrote:

In our view, if Appaloosa is able to stop the acquisition of the VSLR assets and the take-or-pay agreement by TERP, and if somehow SUNE remains obligated to complete the acquisition, SUNE's liquidity would be pressured because (1) SUNE would likely not be able to obtain the $300m secured term loan — which was supported by the TERP take-or-pay agreement, (2) SUNE would have to inject ~$300m to $560m in additional equity into the acquisition.

There aren't a lot of ways SunEdison can get out of doing this deal at this point, according to analysts, so it will have to find the cash or pull it off in a couch cushion or something. Especially because right now private-equity firms that were once really hot on picking up solar assets have gone lukewarm.

"Overall, SUNE's available cash would be ~$570m to $820m lower in Q2/Q3 vs. the company's prior forecast from Jan 7th (but still positive ~$200m to ~$450m at the low point in 3Q16)," the analysts wrote.

Bad deal looking worse

All of this is happening at the worst possible time. If you hadn't noticed, the credit markets have taken a battering of late, and that is pushing the cost of debt up.

SolarCity (SCTY), another residential solar company like Vivint (VSLR), last week raised finance, and the read-across was ugly.

"Cost of capital increases for residential assets following last week's SCTY financing at a 5.8% weighted yield (5.3% weighted coupon) reflecting a ~110 bps increased spread, potentially impacting the VSLR operating portfolio asset value," Credit Suisse said in the note.

SolarCity needs cash to calm Wall Street's nerves, but it isn't clear where it is going to get it from.

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Hedge fund billionaire David Tepper, who runs $20 billion Appaloosa Management, has opened up a small office in Miami.

Tepper's South Beach digs are located on Washington Avenue, according to a filing. 

The office is inside a pastel art deco building with a distinctive glass-brick tower that's illuminated with multicolored lights at night.

The new Miami office was first reported by Reuters Lawrence Delevingne.

The seven-story office building was completed in 1995. It's just 10 minutes from downtown Miami and 20 minutes from the airport. It also looks like Playboy TV used to be a tenant there.

It's definitely an eye-catching building. You certainly can't miss it when you're in SoBe. 

Check it out! 

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