DANBURY, Conn. - FuelCell Energy , Inc. (NASDAQ:FCEL) declared that a reverse stock split of its shares will be effective after the market closes on November 8, 2024. The company aims to meet the Nasdaq's minimum bid price requirement and attract a wider investor base by consolidating every 30 existing shares into one new share of common stock.
The reverse stock split will uniformly affect all common stockholders, preserving their proportional ownership stakes, except for adjustments due to fractional shares. Stockholders who would receive fractional shares will instead get a cash payment, calculated based on the closing price of FuelCell Energy's stock on November 8, 2024.
FuelCell Energy's common stock will continue to trade on The Nasdaq Global Market under the ticker symbol FCEL, with the new CUSIP number 35952H700. The company's common stock is expected to commence trading on a post-split basis on November 11, 2024.
The total number of authorized shares and the par value of the common stock will remain unchanged. Equiniti Trust Company, LLC will serve as the exchange agent for the reverse stock split. Stockholders holding shares electronically in book-entry form or through a broker will not need to take any action to reflect the change. Those with physical stock certificates will receive instructions from Equiniti Trust Company, LLC regarding the exchange of shares and the receipt of cash in lieu of fractional shares.
This strategic move is designed to help FuelCell Energy regain compliance with Nasdaq's minimum bid price rule, which requires stocks to maintain a minimum bid price of $1.00 per share. Compliance with this requirement is crucial for the company to maintain its listing on the exchange.
FuelCell Energy is a prominent player in the field of sustainable energy technologies, holding a significant number of patents and providing solutions to global energy challenges.
The details provided in this article are based on a press release statement from the company. While the reverse stock split is intended to address compliance with Nasdaq listing standards and to potentially broaden the appeal to investors, the company cautions that there are risks involved. These include the possibility that the intended benefits may not materialize as planned or that the minimum bid price may not be sustained post-split.
In other recent news, FuelCell Energy has secured a $9.4 million financing agreement with the Export-Import Bank of the United States (EXIM) to support its fuel cell projects in South Korea. The financing will back a purchase agreement with Gyeonggi Green Energy for forty-two 1.4-megawatt upgraded carbonate fuel cell modules. The company anticipates generating approximately $160 million in revenue over the term of the agreement.
FuelCell Energy has also signed a memorandum of understanding with Korea Hydro & Nuclear Power Co., Ltd to explore hydrogen energy initiatives. The partnership aims to leverage FuelCell Energy's advanced electrolyzer technology and South Korea's domestic clean energy resources to diversify the country's hydrogen supply.
The company reported total revenues of $23.7 million and a net loss of $35.1 million in its latest quarterly performance. Despite the financial loss, FuelCell Energy has increased its backlog to $1.2 billion.
In terms of analyst ratings, KeyBanc maintained its Sector Weight rating on the company's shares, while TD Cowen maintained a Hold rating. Both firms highlighted FuelCell Energy's commitment to managing expenses and maintaining capital discipline. These are the recent developments in FuelCell Energy's operations.
InvestingPro Insights
As FuelCell Energy (NASDAQ:FCEL) prepares for its reverse stock split, InvestingPro data provides additional context to the company's financial situation. With a market capitalization of $192.94 million, FCEL is trading at a low Price / Book multiple of 0.29, reflecting the market's current valuation of the company relative to its book value.
The company's financial health presents a mixed picture. An InvestingPro Tip highlights that FCEL holds more cash than debt on its balance sheet, which could provide some financial flexibility as it navigates this transition. However, another tip warns that the company is quickly burning through cash, which may explain the need for strategic moves like the reverse stock split.
FCEL's revenue for the last twelve months stands at $85.27 million, with a concerning revenue growth of -39.15% over the same period. This aligns with another InvestingPro Tip indicating that analysts anticipate sales decline in the current year.
The stock's performance has been challenging, with a one-year price total return of -69.56% as of the latest data. This poor performance over the past year underscores the company's struggle to maintain its stock price above Nasdaq's minimum requirements.
Investors considering FCEL should note that InvestingPro offers 15 additional tips for this stock, providing a more comprehensive analysis of the company's prospects and challenges. These insights could be valuable for understanding the full implications of the reverse stock split and FCEL's future trajectory in the sustainable energy sector.
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