Ørsted, the world’s largest offshore wind developer, saw its stock collapse by nearly 27% on Monday after announcing a massive 60 billion Danish kroner ($9.4 billion) rights issue. The move, which shocked investors, follows the board’s decision to halt the partial divestment of its Sunrise Wind project off the coast of New York—a transaction that was expected to strengthen the company’s capital base.

The official reason cited was a “material adverse development” in the U.S. market, directly linked to sweeping policy changes introduced by President Donald Trump, who has taken a confrontational stance toward the renewable energy industry, particularly offshore wind.

The Numbers Behind the Crisis

The announced rights issue is one of the largest capital raises in the renewable energy sector in recent years, equivalent to roughly 46% of Ørsted’s market capitalization. Under the plan, existing shareholders will receive the right of first refusal on the newly issued shares. The Danish State—Ørsted’s largest shareholder—has already pledged its support.

This decision comes after the collapse of the Sunrise Wind partial divestment, which was expected to inject equity and project financing worth about 40 billion kroner into the company. Without those proceeds, Ørsted faces a substantial funding gap to sustain ongoing projects, strengthen its balance sheet, and pursue future growth initiatives.

The Trump Administration’s Impact on Wind Power

Since returning to the White House in early 2025, President Trump has acted swiftly to curb the growth of the wind power sector. On his first day back in office, he signed an executive order suspending the issuance of new or renewed onshore and offshore wind leases.

Trump has been outspoken in his criticism of wind farms, describing them as “big ugly windmills” that “ruin neighborhoods.” His administration has championed the oil and gas sectors while imposing stricter regulatory and economic conditions on renewable energy projects, creating uncertainty for developers like Ørsted.

Why the U.S. Market Matters to Ørsted

The U.S. had been a cornerstone of Ørsted’s long-term strategy, with major investments along the East Coast, including Sunrise Wind—a flagship project intended to serve as a major revenue stream. With changing regulations and the withdrawal of potential project partners, the financial feasibility of Sunrise Wind has been undermined, leaving Ørsted without a critical piece of its capital structure.

Management has stated that the rights issue will ensure the company can still unlock the full potential of its existing offshore wind portfolio and capture future growth opportunities worldwide.

Market Reaction and Analyst Commentary

Investor reaction was swift and severe. By mid-morning in London, Ørsted shares had fallen 26.8%. Analysts described the announcement as a “surprise” that rattled market confidence.

UBS analysts noted that Ørsted had previously communicated a disposal plan worth 70–80 billion kroner. However, the size of the rights issue—almost half of the company’s market value—was “very large” and signals significant financial strain. In a high interest rate environment, they argued, the offshore wind business model becomes less viable and more dependent on equity financing. UBS also said investors would expect a clear post-rights issue business plan to restore growth prospects.

The Broader Economic and Industry Context

Ørsted’s challenges are not limited to the U.S. policy shift. Like many renewable energy developers, the company has faced rising financing costs, supply chain disruptions, and higher raw material prices over the past few years.

These macroeconomic pressures have eroded profit margins and slowed project timelines. The combination of hostile U.S. policy and a difficult global cost environment illustrates how vulnerable the renewable energy sector remains to political and economic volatility, despite the global push toward decarbonization.

Strategic Implications

In the short term, the rights issue is intended to shore up Ørsted’s capital base, secure funding for ongoing projects, and maintain credit ratings. The Danish State’s backing is a crucial signal of stability, but it may not be enough to reassure markets without a clear path to future profitability.

Over the long term, Ørsted may need to reconsider its geographic exposure. The U.S. market, once seen as a key growth engine, has now become a high-risk environment for renewable investments. Analysts expect the company to explore expansion in Europe and Asia, where government support for offshore wind remains stronger and more predictable.

Industry-Wide Repercussions

Ørsted’s situation sends a cautionary signal to other renewable energy developers operating in politically volatile markets. The rapid shift in U.S. policy underlines the sector’s dependence on stable regulatory environments. For institutional investors, this raises questions about risk-adjusted returns in jurisdictions where policy can change dramatically with election cycles.

Moreover, the size of Ørsted’s rights issue could temporarily dampen sentiment toward the broader renewable energy sector, particularly offshore wind, where projects require high upfront capital investment and long development timelines.

Statements from Ørsted’s Leadership

Ørsted CEO Rasmus Errboe acknowledged the extraordinary challenges facing the company and the industry as a whole. “Ørsted and our industry are in an extraordinary situation with the adverse market development in the U.S. on top of the past years’ macroeconomic and supply chain challenges,” he said.

“To deliver on our business plan and commitments in this environment, we’ve concluded that a rights issue is the best solution for Ørsted and our shareholders. The rights issue will reinforce our ability to realize the full value potential of our existing portfolio and capture future value-creating opportunities in offshore wind.”

The Path Forward

For Ørsted, the immediate priority will be executing the rights issue successfully and ensuring strong shareholder participation. Once the capital is raised, the company will need to present a revised strategic roadmap that addresses the loss of U.S. growth opportunities while preserving its position as the global leader in offshore wind.

The market will be watching closely to see whether Ørsted can pivot toward new regions or technologies to offset the political and economic headwinds it faces.

Conclusion

Ørsted’s massive rights issue and the collapse of its Sunrise Wind divestment highlight the delicate balance renewable energy companies must maintain between ambitious growth strategies and the realities of political and economic risk. While the Danish State’s support offers a degree of stability, investors will expect more than capital—they will demand a credible, diversified growth plan that can withstand future market shocks.