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EEENF Stock: The Huge News That Has 88 Energy Rocketing Higher

Today, investors in 88 Energy (OTCMKTS:EEENF) and EEENF stock are seeing impressive gains. Shares of this over-the-counter stock are up 25% at the time of writing on heavy volume.

miniature oil barrel and oil well figures on top of stack of money

Source: Shutterstock

Indeed, today’s move appears to be driven by some rather optimistic news. And we’ll get to that in a second.

However, looking at 88 Energy’s stock chart, there has been a lot of volatility. This is a stock that has gone on a number of runs this year. Indeed, it appears penny stock investors are looking for a reason to bid up this EEENF stock. After all, its current price around 2 cents is cheap enough for any investor to jump in. Such a low stock price invites a range of retail investors to load up on shares in anticipation of any big move.

And as we’ve seen with the recent short squeeze mania, investors are eager for opportunities.

Let’s dive into the specific catalyst that’s taking investors in EEENF stock on a nice ride today.

Tax Credit Sale Boosting EEENF Stock

Today, it was reported that 88 Energy has agreed to sell its Alaskan oil and gas tax credits for $18.7 million. While this is a relatively small sum for most companies, for 88 Energy, this is a meaningful chunk of change.

The company intends to use the proceeds to repay its entire outstanding debt load. The company’s existing $16.1 million debt with FCS Advisors that’s set to mature in December 2022 is now off the table. Thus, investors are looking at this company with a new set of eyes today, given the balance sheet cleanup the company’s management team was able to orchestrate.

According to the company’s press release, 88 Energy’s cash hoard will also increase by the incremental $2.6 million over and above its debt obligations. This will provide the company with increased liquidity at a time when many investors were starting to worry about the financial condition of EEENF stock. Additionally, 88 Energy will avoid $1 million of overhead in associated finance costs as a result of this transaction.

For a company with a market capitalization of $265 million at the time of writing, this is big news. Leverage can be a good and a bad thing for companies. However, less leverage is turning EEENF stock green today.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2021/06/eeenf-stock-the-huge-news-that-has-88-energy-rocketing-higher/.

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