For a long time, traders knew California-headquartered SPI Energy (NASDAQ:SPI) for providing solar project solutions throughout the United States, Europe and Japan. On Oct. 13, I suggested that SPI Energy stock is, above all else, an interesting and unique investment.
On the same exact day, InvestorPlace contributor Josh Enomoto advised that people should avoid SPI Energy stock. As you can see, one of the best features of InvestorPlace is that we offer a diversity of viewpoints.
Speaking of diversity, my main argument in favor of SPI Energy stock is that the company is involved in a broad array of markets. These include green energy, electric vehicles, cryptocurrency and hemp/cannabidiol (CBD).
Enomoto took a different viewpoint from mine. He implored, “unless you know what connects solar, weed, cryptos, and EVs, stay away from SPI stock.” Perhaps it’s worthwhile, then, to take a second look at this unusual company. Then you can decide whether the stock really belongs in your holdings.
A Closer Look at SPI Energy Stock
As InvestorPlace contributor Sarah Smith reported on Sept. 23, SPI Energy stock spiked 700% as the company revealed that it’s launching a subsidiary, EdisonFuture, with the purpose of designing and developing electric vehicles and charging solutions.
Prior to that watershed event, SPI stock was barely able to get above $1. This was problematic because it was a likely contributing factor in SPI Energy receiving a delinquency notice from the Nasdaq exchange in March.
Then, a couple of months later, SPI Energy disclosed received a notice from Nasdaq warning that the company’s stock was out of compliance with the exchange’s listing requirements. This was because the bid price of SPI Energy stock had been below $1 for 30 consecutive business days.
With the Sept. 23 price spike, however, SPI Energy shares touched a 52-week high of $46.67. This was followed by a significant price decline. Still, in mid-October the share price remains above $1. As a result, SPI Energy stock has remained in compliance and listed on the Nasdaq exchange.
Are We Being Trolled?
When it comes to SPI Energy stock, Enomoto revealed that he felt like he’s “being trolled.”
Enomoto doesn’t believe that “the guy that makes your car should be the same guy that rolls your joint” and furthermore, “just because that same guy is also managing your solar energy projects and mining your cryptocurrencies doesn’t add to my confidence.”
Enomoto bolsters his argument by pointing out that SPI Energy isn’t merely dabbling in these disparate industries. Rather than just occasionally manufacturing components, the company is fully immersed in the four aforementioned markets.
This argument is duly noted and has merit. Still, I don’t feel like SPI Energy is attempting to “troll” investors. Instead, I would frame this situation as a company that’s chasing trends.
No Need to Be First
As a rebuttal to Enomoto’s line of reasoning, I would say that not every company has to be first on the scene when it comes to CBD or electric vehicles or cryptocurrency mining. There’s money to be made from imitating rather than innovating.
Furthermore, I would contend that it could be advantageous to be involved in so many niches. If any one of SPI Energy’s endeavors is highly successful, it might be enough to justify the company’s existence.
Besides, the company can form partnerships along the way. For instance, SPI Energy just entered into a “strategic cooperation framework agreement” with Chinese vehicle manufacturer Shaanxi Tongjia Automobile Co., Ltd.
That company, trough this collaboration, will help SPI Energy design, develop and produce electric pickup trucks and logistics vehicles. Perhaps through partnerships like this, SPI Energy can succeed in at least some, if not necessarily all, of its endeavors.
The Bottom Line
I greatly respect Enomoto’s article and recommend that you read it to get the other side of the argument. Then decide for yourself whether SPI Energy’s participation in an unusually broad array of industries is justifiable.
If so, then SPI Energy stock might be worthy of inclusion in your portfolio.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.