Camber Energy (NYSEAMERICAN:CEI) has been a penny stock for quite some time. Penny stocks are high-risk stocks mainly because they tend to have a low market capitalization, and their stock price is highly volatile. While you can find penny stocks that are diamonds in the rough — stocks with great prospects and strong fundamentals — CEI stock is just not one of them.
Back in October 2021, I wrote an article arguing that CEI stock is a volatile and risky play on the energy sector. I explained that delinquent reports are a reason to run and massive stock dilution was bad for the stock price. The lack of solid fundamentals made this energy stock a poor candidate for growth and value investors.
I also highlighted the risk of the stock getting delisted soon. Not much has changed in the months since my previous article, although there has been news related to financing activities.
Continued Delinquency From Camber
In my October 2021 article, I wrote that Camber Energy last posted a 10-K form in June 2020 and its most recent 10-Q report was filed in December 2020. Camber corrected this in November when it posted form 10-K/A for the fiscal year ended March 31, 2020 and form 10-Q/A for the quarterly period ended September 30, 2020.
Is this an improvement in its obligations as a public-trade company to report timely information and make all the necessary SEC filings? Look to the company’s latest press release to find out:
“Camber Energy … announced that on January 4, 2022 it received a letter from the NYSE American … wherein the Exchange advised the Company is not in compliance with the continued listing standards as set forth in Section 704 of the NYSE American Company given the Company did not hold an annual meeting for the fiscal year ended December 31, 2020 by December 31, 2021.”
However, the company said it plans to fix this delinquency by hosting an annual meeting of stockholders after filing all the necessary SEC filings required.
Camper Energy reassured its investors that this letter does not have any negative effect on its listing on NYSE American, only that a “BC” indicator will be affixed to its trading symbol.
Another press release worth reading is one from October in which CEO James Doris says “our business relationships are legitimate and that we are firmly committed to improving the organization’s capitalization and executing on our growth strategy. With respect to the Company’s public filings, our objective is for the Company to become current on or before the expiry of the Initial Cure Period as established by the New York Stock Exchange, which is on or about November 19, 2021.”
What can we take away from this? First, the company’s failure to meet deadlines shows a concerning lack of reliability.
Second, this is a show of arrogance and disrespect by Camber towards the rules and obligations of publicly traded companies and towards the integrity of the financial and capital markets. The stock market is not a circus; it has established rules, obligations and regulations to protect investors.
Camber’s latest fundamentals are dated back to 2020, and we are in 2022 now. What do investors know about the latest business and financial performance over the past quarters? Nothing.
I do not know why NYSE American has been so soft on this delinquency, and I’m surprised Camber hasn’t been de-listed yet.
The Bottom Line on CEI Stock
Meanwhile, Camber Energy has announced that it closed a $100 million equity transaction with an institutional investor and that it closed a $25 million transaction with institutional investors for a loan with a maturity date of Jan. 1, 2027.
This will only further CEI stock dilution.
And as for the quarter ending September 2020 (again, the most recent the company has reported on), the company reported a net loss of $22.31 million on revenue of $57,458. That’s with a market capitalization of nearly $200 million.
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On the date of publication, Stavros Georgiadis, CFA 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.
Stavros Georgiadis is a CFA charter holder, an Equity Research Analyst, and an Economist. He focuses on U.S. stocks and has his own stock market blog at thestockmarketontheinternet.com/. He has written in the past various articles for other publications and can be reached on Twitter and on LinkedIn.