Evergreen Energy (EEE) is on sale, but should you buy?
Today's Financial News - Posted October 2, 2008
Evergreen Energy (EEE) is up 9% today, but that’s only after it fell 42% yesterday. But EEE isn’t just another casualty of the market crisis. The company has potential, and buying today could get you in while the stock is still on sale, if you’re not afraid of a little risk.
by Stephanie Grimmett
Baltimore — (TFN): Evergreen Energy (NYSE:EEE) crashed yesterday. And when I say “crashed”, I mean it tumbled to almost half its open price by the end of the day. The stock lost 42%, but that’s a good thing… for us, at least.
Evergreen Energy is in the business of clean coal. The company has a proprietary process (called K-fuel) that turns low-quality coal into high-quality low-emmissions coal.
Evergreen owns a 750,000 ton per year facility in northeast Wyoming that processes local coal, which tends to have high moisture content and low energy output, into a fuel with low moisture content, high energy output and less sulfur dioxide and nitrogen oxide emissions. The new product is cleaner and more efficient than normal coal.
So why did the stock price collapse? Because Evergreen just diluted its shares, converting 70% of its outstanding notes into common stock. The company wanted to release its subsidiary Buckeye Industrial Mining from the constraints of being collateral on the notes. But that’s not what’s so interesting.
When Evergreen converted the shares, the trade volume shot up to almost 7 million shares, as investors bought Evergreen like never before.
And today we’ve seen the stock gain nearly 9% (as of 12:30 p.m.). The market thinks this stock is undervalued, and it’s viewing the dilution as a sale. But before you jump into this company, remember it has yet to turn a profit.
Evergreen is still in the development stage. And it’s a penny stock. So it could be less liquid than the large caps you may be used to dealing with.
But if you do have a high enough risk tolerance, Evergreen could reap you some delightful returns on your investment as the shares move back up.
****Make sure you sign up for our FREE TFN News Feed for breaking news, special reports and new financial videos. You can pick your favorite reader. Or if you prefer, you can have the feed delivered to your email.
Next Article: Bailout bill: Corrupt politicians steal your money
One Response to “Evergreen Energy (EEE) is on sale, but should you buy?”
Your comments are welcome
Follow TFN via RSS or Twitter |
 |
 |
 |
Advertisement
Latest Headlines
- The Big Picture for Sinobiopharma, Inc. (SNBP)
- Beazer Homes USA, Inc. (BZH) and Hovnanian Enterprises, Inc. (HOV) up despite horrid housing news
- The FDA catalyst: 2010 moves in MannKind (MNKD), Roche Holding (RHHBY), Acorda Therapeutics (ACOR) show it still works!
- Steepest drop since Feb. 2009: Here we go again!
- Is the silver run over? Coeur d’Alene Mines (CDE), Silver Wheaton (SLW), Alto Group (ALTO), Hecla Mining (HL), Endeavour Silver (EXK) close down
January 15th, 2010 at 4:34 am
Evergreen does not produce anything. Their only coal processing plant is a flop and is closed down, plagued by explosions and fires. No utility is interested in buying “K-fuel” even if the company could figure out a way to actually produce it.