Camber Energy (CEI) Stock Tanks But May Bounce Back

Camber Energy CEI Stock News

Camber Energy Inc (NYSEAMERICAN: CEI) is having a rough day int he market today. After tremendous gains in the market yesterday, led by the fact that the company completed the Lineal Star Holdings acquisition, the stock is down more than 35% so far today. So, what’s next?

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CEI Stock May See Strong Gains Ahead As Conditions Improve

The truth of the matter is that when you play the penny stock game, you’re going to see a lot of ups and downs. So, it’s not surprising to see that strong gains are being met with profit taking today. Nonetheless, in the long run, there may be a strong opportunity here as conditions seem to be improving.

First and foremost, a couple of days ago, CEI announced a notice of continued deficiency from the NYSE American. Sure, the title sounds bad, but the news in the announcement was positive.

The listing deficiency had to do with a low trading price. Nonetheless, in the release, the company announced that the remedy became effective on the same day of the announcement. The company moved forward with a 1-for-25 reverse stock split, bringing the bid price up well above NYSE American requirements.

Sure a reverse stock split is never what investors want to see. However, avoiding being delisted from the NYSE American through a cosmetic change was a must, and could set the stage for strong activity ahead.

Moreover, yesterday, the company announced that it completed the acquisition of Lineal Star Holdings. This news was significant because of the assets being acquired. After all, Lineal Star has been in operation for more than six decades and is a strong driver of revenue. So, immediate revenue growth can be expected as a result of the closing of this transaction.

Nonetheless, revenue isn’t the only way that the Lineal Star acquisition will benefit CEI. Think about it, Camber’s primary assets are in the production of energy related materials like natural gas. Products and services offered by Lineal Star are the same products and services that the company needs. By serving its own company through a wholly-owned subsidiary, the company has the ability to reduce costs.

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Final Thoughts

It’s no secret that Camber Energy still has a few hurdles that it needs to get over. Nonetheless, the company is making the right moves and headed in the right direction. While immense profit taking leading to more than 30% declines can be concerning, this may be doing nothing more than opening the door to opportunity!

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