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At first glance, a diversified energy and electrical solutions company Camber energy (NYSEAMERICAN:IEC) may seem like a great company to invest in. After all, CEI stock is cheap and value hunters might think it might rally.
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However, it is important to temper our fantasies with a healthy dose of realism. When a stock slips below the crucial $1 level, it can run into trouble, and sane investors probably don’t want to get involved in toxic stocks.
May be Reddit traders can rescue the CEI stock by triggering an epic short squeeze in the stock. However, buying a stock in the hope that social media traders will come to its rescue. is not an ideal strategy.
Plus, as we’ll find out, Camber Energy is in desperate need of a financial makeover, to put it politely. All in all, it’s fine to watch Camber Energy from afar, but now there are better places to park your hard-earned capital.
A closer look at CEI action
For much of 2021, stock trading on memes was all the rage and Camber Energy may have been the target of a huge short-term squeeze.
Otherwise, it would be hard to justify CEI stock’s jaw-dropping move from 34 cents in August to $4.85 in September. It was an exciting time, but the rally was not meant to last.
After peaking, shares of Camber Energy dipped below the key $1 level in October. Fast forward to today, and the stock is trading around 65 cents.
To be fair, CEI stock is probably too volatile for cautious investors to consider. It might be worth taking a little speculative position in the name. But anyone who does will be battling a powerful downtrend.
A lack of reliability
Just recently, InvestorPlace contributor Stavros Georgiadis examined the implications of Camber Energy’s friction with the New York Stock Exchange (NYSE).
Camber Energy, according to Georgiadis, exhibited “non-compliance with deadlines” and, consequently, a “worrying lack of reliability”.
Exhibit A is Camber Energy’s description of a letter she received not long ago.
Apparently, in the letter, the NYSE warned Camber Energy that the company “is not in compliance with continuous listing standards… given that the company did not hold an annual meeting for the fiscal year ended December 31, 2020 to December 31, 2021” .
I have to side with Georgiadis on this one. Failing to hold an annual meeting in a timely manner seems like a rookie mistake that could easily have been avoided.
Camber Energy is unlikely to be disbarred based on this violation alone. Nonetheless, Camber’s failure to comply with New York Stock Exchange listing rules shows “arrogance and disrespect,” as Georgiadis aptly put it.
Opaque and gloomy
With its venture into clean alternative fuels, Camber Energy may be able to tap into the future of the energy market effectively. However, this could just be a futile fantasy if the company continues to withhold (or, failing that, simply doesn’t possess) critical financial information.
After reviewing Camber’s website and the United States Securities and Exchange Commission (SEC) page, I believe that Camber Energy has not issued a quarterly Form 10-Q since 2020.
On the other hand, several SEC forms filed by Camber show that the company was unable to file some or all of the SEC disclosures in a timely manner. The company’s lack of transparency, stemming from its inability to provide available financial information, is frustrating.
Meanwhile, Camber’s latest budget results, which cover the third quarter of 2020, are pretty dismal. During this quarter, Camber Energy suffered a staggering net profit loss of $22.3 million.
Camber Energy appears to be in a terrible financial mess. There’s no way to be sure, as the company withholds its recent financial data or simply doesn’t have it.
Either way, that’s bad news. Additionally, Camber’s friction with the NYSE is an additional source of consternation. There are many clean energy investment opportunities. So CIS stock, while certainly cheap, is not one of your best bets for 2022.
As of the date of publication, David Moadel had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.