Camber Energy CEI Stock News

Camber Energy Inc (NYSEAMERICAN: CEI) is climbing early on in the trading session this morning, with gains of more than 11%. While no news has been released, the stock is bouncing back as I suggested that it would in a post published on July 10, 2019. Here’s what’s going on:

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CEI Is Bouncing Back

On July 10, 2019, I published the post linked to above, predicting that the declines seen in the session were an opportunity, and that opportunity is coming to life early on this week.

The drop came after the stock saw tremendous gains as the result of the Lineal Star acquisition closing (we’ll get to that in a bit). However, as is often the case in the penny stock game, the strong gains in CEI seen after the acquisition were followed by some serious profit taking, generating an opportunity.

About the Lineal Star Acquisition

On July 9, 2019, CEI announced that it had completed the previously announced acquisition of Lineal Star Holdings. This acquisition completion was a key move in the right direction.

Lineal Star Holdings has been in operation for more than six decades with a strong history in the oil and gas industry. The company is focused on engineering and providing pipeline services to oil and gas producers.

As mentioned in my article on July 9, 2019, the acquisition will benefit Camber Energy in two key ways. First and foremost, Lineal Star Holdings has been operational for 64 years and is a strong revenue generator.

However, the acquisition will benefit CEI even further. With the company being in the energy commodity production business, it benefits from the types of services offered by Lineal Star Holdings. As the owner of the company, CEI will benefit from lower cost services, bringing it’s overhead down and opening the door for wider margins.

A Recent Revers Split Is Also Great News

In early July, CEI announced that it would be moving forward with a reverse stock split. While investors tend to avoid stocks that go through reverse splits, this proved to be a strong move for multiple reasons.

First off, Camber Energy was facing delisting as a result of a low trading price. The reverse split brought the value of the stock well over the $1 minimum bid requirement, allowing it to maintain its listing and access to investors through the NYSE American.

Moreover, institutional and other big-time investors tend to shy away from stocks with a trading price below $1. Some will shy away from stocks with trading prices below $3 per share. The reverse split brought the price of CEI to well over $4 per share. As a result, the cosmetic change will likely make the stock more attractive to key investors.

The Bottom Line

The bottom line here is simple. Camber Energy is making the right moves at the right time. As a result, the stock is seeing strong growth and the company will benefit from expanding revenue and decreasing costs. All in all, if you’re not paying attention to the stock yet, now is the time to start!

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1 COMMENT

  1. I agree completely. If you can wait it out, buy them up now that they are below $3. It’s definitely going to go back up!

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