Camber Energy CEI Stock News

Camber Energy Inc (NYSEAMERICAN: CEI) is trading on weakness this morning after executing a one for 25 reverse stock split. Nonetheless, the weakness caused by the reverse split may prove to be an opportunity. Here’s what’s going on:

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CEI Stock Falls On Reverse Split

As mentioned above, Camber Energy is trading on weakness this morning after issuing a press release announcing the effectiveness of a reverse stock split and NYSE compliance news. Unfortunately, CEI has not been in compliance with NYSE listing requirements for some time as the stock’s bid price hasn’t been $1 or more per share as required.

As such, the company announced that it received a deficiency letter from the NYSE stating that it is not in compliance with this standard. To remedy the situation, the company announced that it would be moving forward with a 1-for-25 reverse stock split, bringing the price per share well over the minimum bid requirement.

So, the compliance issue should be solved at this point. Nonetheless, the move concerns investors as while a reverse split is more cosmetic that anything, it also means that CEI saw no other option to bring its share price up before the deadline of January 2, 2020.

Deal Closing Expected Today

In the press release, Camber Energy also announced an update with regard to the closing of an acquisition. Previously, the company said that it would acquire oil and pipeline service company, Lineal Holdings, in an attempt to increase shareholder value.

In the announcement this morning, CEI said that the closing of this transaction has been scheduled for today, July 8, 2019. In preparation for the closing, the company said that all consents and required signatures have been obtained.

Is This An Opportunity?

The dip that we’re seeing from CEI may prove to be a strong opportunity in the long run. At the end of the day, there is some real positive news here. First and foremost, while the reverse split is concerning, it also brings the stock price above the minimum bid threshold, which will allow it to maintain its listing on the NYSE American.

Moreover, the closing of the deal with Lineal Holdings is also great news. The pipeline service will likely lead to a significant increase in revenue. Moreover, considering that the company Camber Energy will likely use its own services provided by its newly-acquired Lineal subsidiary, costs will likely be reduced on projects ahead. All in all, there is plenty of positive to look forward to here, and CEI may be setting up for strong long-run value growth.

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