Why Did NFE Stock Fall 14% Today?
Synopsis
In an SEC filing on Friday, NFE's management raised concerns over the company’s ability to continue as a going concern.
- New Fortress Energy’s revenue for the period slumped 42.3% to $327.4 million.
- The company reported a net loss of nearly $300 million in the quarter ended September, compared to a profit of $8.1 million.
- Despite the intraday decline, retail sentiment flipped to ‘extremely bullish’ from ‘bearish’ a day earlier.
Shares of New Fortress Energy Inc. (NFE) tumbled as much as 14% on Friday after the management raised doubts about the company’s ability to continue operating as a going concern and the firm reported a weak third-quarter print.
New Fortress Energy reported a net loss of nearly $300 million, or a loss of $1.07 per share, in the quarter ended September, compared to a profit of $8.1 million, or $0.03 per share, a year earlier. The company’s revenue for the period slumped 42.3% to $327.4 million.
Going Concern Doubts
The firm has struggled with debt and raised concerns about its ability to continue operating as a going concern. “As such, management has concluded that our current liquidity and forecasted cash flows from operations are not probable to be sufficient to support, in full, its obligations as they become due, and there is substantial doubt as to the company’s ability to continue as a going concern,” a statement from its SEC filing read.
According to a Reuters report, New Fortress Energy’s financial troubles stem from a lack of long-term LNG supply deals for its Latin American power assets, and from its low credit rating, which has forced it to rely on more expensive spot gas.
How Did Stocktwits Users React?
Despite its challenges, the stock has been on an uptrend, gaining in the last four sessions. On Thursday, the stock closed nearly 26% higher, then jumped over 20% in extended trading after the company announced it had struck a deal with some of its lenders to extend the maturity of a credit facility.
Despite the intraday decline, retail sentiment flipped to ‘extremely bullish’ from ‘bearish’ a day earlier, amid ‘extremely high’ message volumes.
Year-to-date, the stock has slumped by over 90%.
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