Energy stocks tend to be solid issues, and why not? Everyone needs energy. But for Uranium Energy Corp (NYSE:UEC), the fallout from a recent report from Kerrisdale Capital will hit hard and be wide-reaching. Sufficiently so, in fact, that Uranium Energy lost 14.73% in Thursday’s trading.
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Kerrisdale Capital offered up a short report that’s a chain reaction of disasters. First, Kerrisdale suggests that Uranium Energy’s assets aren’t a match for its market cap, suggesting a reversal may come at almost any time. Kerrisdale pointed out that “…directly or indirectly, approximately 30 different entities (were paid to) publicize its stock.” Worse yet, Kerrisdale also suggests that Uranium Energy has blundered several times, engaging in deals for “overpriced” assets. Kerrisdale went on from there, pointing out that Uranium Energy didn’t capitalize on recent price spikes in uranium.
All of that was bad enough, but the hits kept on coming. Kerrisdale pointed out that, though Uranium Energy has around 140 million pounds of uranium available to it—that’s an estimate, of course—not one pound of it can be mined at current prices without taking a loss on the deal. Worse, even at higher prices, roughly just one ounce in four of Uranium Energy’s available resources could be “economically viable.”
It’s a string of disasters, and looking at the last five days in trading, it’s clear that’s what Uranium Energy didn’t need. The stock managed to hold a pretty clear line around $3.30 for most of the last five days. Today, however, was a whole different matter as shares plummeted. Though a couple attempted rallies started, none of them could catch, and that left Uranium Energy shares down over 14% today.
