CUI Global Inc. (NASDAQ:CUI) Drops After Pricing Offering

CUI Global Inc. (NASDAQ:CUI)

CUI Global Inc. (NASDAQ:CUI) traded lower after announcing the pricing of a previously announced underwritten public offering of 6.4 million shares at a price of $2.80 per share. Shares of the company fell 2.35% in Thursday’s trading session to end the day at $2.91 a share.

CUI Global Inc. (NASDAQ:CUI)

Public Offering

In addition to the pricing of 6.4 million shares, the diversified holding company has also granted underwriters a 45-day option for the purchase of an additional 964,285 shares. CUI Global expects gross proceeds of $18 million from the offering assuming underwriters don’t exercise the over-allotment option.

CUI Global Inc. (NASDAQ:CUI) plans to use net proceeds from the offering for general corporate purposes including operating expenses as well as working capital. The company also plans to use part of the funds to promote its commercially available products and advance the development of product candidates.

CUI Global Inc. (NASDAQ:CUI) free fall appears to be gaining momentum as the stock has recorded a new 52-week low. The stock has underperformed the overall industry having shed more than 50% in market value since the start of the year. The stock is currently trading in a strong downtrend after dropping to multi-year lows.

Italian Operations

Separately, distribution of CUI Global Inc. (NASDAQ:CUI)’s GasPT solution will resume in 2018 after the Italian Energy Authority resolved its tariff dispute with Socrate SpA, the national gas transmission company. The company’s wholly owned subsidiary based in the, U.K Orbital Gas Systems, had been awarded a sole source contract last year by Socrate SpA.

The contract is for the delivery of a minimum of 3, 300 GasPT units and a maximum of 7,000, for a period of between 3 and 5 years. The company subsidiary had initially received an order of 400 units from its Italian distributor.

“We look forward to resuming deliveries in early-2018; to continuing our partnership with Socrate on our largest contract to date; and to redefining the industry’s standards for fiscal monitoring of natural gas quality with our GasPT technology,” said CEO William Clough.

In addition, CUI Global Inc. (NASDAQ:CUI) is finalizing financial results for the three months ended September 30, 2017. The company expects revenues of between $21 and $22 million compared to revenues of $23.3 million reported last year. EBITDA earnings on the other end should range between $1.1 million and $1.4 million compared to $131,000 reported last year.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

Big Move for Clean Diesel Technologies, Inc. (NASDAQ:CDTI)

Clean Diesel Technologies, Inc. (NASDAQ:CDTI)

Clean Diesel Technologies, Inc. (NASDAQ:CDTI) stock rocketed up over 28% in Friday’s trading on the back of over 5 million shares traded – over 35 times the stock’s 30-day, daily average. The Thursday close of $1.65 was just $0.13 above the 52-week low of $1.52 which was hit in August. However, CDTI shares are still over 43% below their 52-week high of $3.72 that was hit last May.

Clean Diesel Technologies, Inc. (NASDAQ:CDTI)

Clean Technologies Business Model

Clean Diesel Technologies, Inc. (NASDAQ:CDTI) is a global manufacturer and distributor of heavy duty diesel and light duty vehicle emissions control systems and products to major automakers and retrofitters. Accordingly, their business is largely moved by legislation addressing global emission standards in response to government concerns over the effects of fossil fuel usage.

The company has two revenue producing channels. Their Heavy Duty Diesel Systems Division specializes in the design and manufacture of verified exhaust emission control solutions. Their Catalyst Division produces catalyst formulations for gasoline, diesel and natural gas-induced emissions.

CDTI Stock

Clean Diesel Technologies, Inc. (NASDAQ:CDTI) has a market capitalization under $50 million and CDTI is considered a micro-cap stock. However they have considerable sales revenues for a company their size although the figures have been declining. In 2012, Clean Diesel Technologies, Inc. (NASDAQ:CDTI) reported sales of $60.5 million. That number has declined year-on-year and for 2016 the reported figure was just $36.8 million. Earnings have not been pleasant for the investors either. In 2012 the loss was (-$6.71) per share. That figure shrank each of the successive three years and in 2015 the per share loss was only (-$2.67). Unfortunately, the loss expanded in 2016 to (-$3.84). Dilution has also weighed on CDTI stockholders. The number of outstanding shares has increased from 1.45 million in 2012 to 6.11 million in 2016.

The consensus target price for CDTI stock is $3.00 – around 48% higher than where the shares are currently valued.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $CDTI and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

Yawns Greet Gevo, Inc. (NASDAQ:GEVO) News

Gevo, Inc. (NASDAQ:GEVO)

Gevo, Inc. (NASDAQ:GEVO) shares gained 0.71% after the renewable energy technology company announced it will partner Los Alamos National Laboratory (LANL) to improve the energy density of some of its hydrocarbon products. The two are also to share ideas on ways to fine tune the composition of the catalysts used in Gevo’s proprietary ETO process.

GEVO Stock Performance

Shares of Gevo continue to trade in a downtrend despite the signing an agreement with LANL. The company faces an uncertain future especially on the stock dropping below $1, a minimum requirement for continued listing in the NASDAQ.

Gevo, Inc. (NASDAQ:GEVO) has been under pressure since the start of the year as seen by the stock losing more than 80% in market value. Investor confidence on the stock is at all-time low. Industry observers are keenly waiting to see if the LANL deal is the catalyst that will help breathe life into the stock.

Gevo, Inc. (NASDAQ:GEVO)

LANL – GEVO Collaboration

LANL and GEVO are planning to develop a low-cost catalytic technology that is to be integrated into an existing isobutanol-to-hydrocarbons process that reportedly produces high-energy density fuels. HEDFs are currently being used by the U.S military in air and sea-launched cruise missiles.

“Currently, certain HEDFs are supplied by limited suppliers, so the DOD is interested in supporting alternative sources of these fuels, and potentially at a lower cost. The added benefit that this would be a renewable fuel that helps reduce greenhouse gas emissions is just icing on the cake,” said Dr. Patrick Gruber, Gevo’s Chief Executive Officer.

ATJ – Virgin Airlines Deal

Separately, Gevo, Inc. (NASDAQ:GEVO) has inked a deal that paves way for it to start supplying its renewable alcohol-to-jet fuel (ATJ) to the Virgin Australia Group. The airline will be responsible for coordinating purchase, supply, and blending of ATJ into the fuel system at the Brisbane Airport. The Queensland government has already echoed its support for the arrangement which it says is the first step in the development of renewable jet fuel.

Gevo, Inc. (NASDAQ:GEVO) is to supply the ATJ from its hydrocarbon plant in Texas. The company plans to expand its production capabilities at the Luverne Facility to meet the growing demand. Plans are also underway to obtain binding supply contracts for a combination of isobutanol and hydrocarbon products, which should be equal to the expected capacity increase.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $GEVO and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

How U.S. Energy Corp. (NASDAQ:USEG) Trimmed Debt By 84%

U.S. Energy Corp. (NASDAQ:USEG)

Shares of U.S. Energy Corp. (NASDAQ:USEG) gained 26.7% after the energy company announced plans to reduce its outstanding debt through an exchange transaction with APEG Energy II L.P. The company’s board of directors has approved the transaction.

U.S. Energy Corp. (NASDAQ:USEG)

Debt Exchange Agreement

Under terms of the agreement, U.S. Energy Corp. (NASDAQ:USEG) will exchange $4.4 million of debt, drawn under its credit facility, for 5,819, 270 shares at a par value of $0.01 a share. Unpaid interest on the credit facility is to be paid in cash at the closing of the transaction.

Completion of the transaction will result in APEG holding approximately 49.9% of the U.S Energy Corp’s outstanding common stock.

“With a transformed and deleveraged balance sheet and an experienced management team like theirs, we see tremendous opportunities for growth and value expansion for both U.S. Energy and Angelus Private Equity Group investor,” APEG in a statement.

USEG Investor Reaction

A move to trim debt went well with investors, as seen by the stock spiking to highs of $1.30 a share before it fell to end Thursday‘s trading at $0.95 a share. However, the stock has underperformed the overall industry and is down by more than 10% for the year.

U.S. Energy Corp. (NASDAQ:USEG)’s Chief Executive Officer, David Veltri, attributes the company’s poor performance to a decline in global commodity prices that has put tremendous pressure on the balance sheet and cash flows. However, he remains upbeat about the energy company’s long-term prospects at the back of the new partnership with APEG

“This Transaction is transformative for U.S. Energy Corp. (NASDAQ:USEG), and, if completed, will reduce the Company’s existing debt by 84% while saving the Company $0.4 million in annual interest payments. We believe that the Transaction is critical to unlocking shareholder value in the Company, restoring access to outside capital and allowing the Company to resume participating in growth,” said Mr. Veltri.

Standstill Agreement

In connection with the Debt Exchange Agreement, U.S Energy Corp has entered into a Standstill Agreement with APEG Energy that will be in effect for one year from the closing of the Transaction. Pursuant to the Standstill Agreement, APEG is required to vote its shares in proportion with the non-APEG shares on all matters. The agreement also includes restrictions that prevent the company from acquiring additional shares of U.S. Energy Corp. (NASDAQ:USEG).

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $USEG and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

SunPower Corporation (NASDAQ:SPWR) Completes Sale

SunPower Corporation (NASDAQ:SPWR)

Shares of SunPower Corporation (NASDAQ:SPWR) declined more than 6.9% in the last session after an announcement that the company had completed an asset sale transaction in Chile.

The stock pulled back 6.94% to end the regular trading session at $7.11 on a day characterized by low volume trading. As the market continued to digest the asset transaction announcement, SunPower moved up 0.14% in afterhours trading to close the day at $7.12.

The regular session losses and the after-hour’s session gains left SunPower up 7.6% since the beginning of the year and down 16.6% over the last 12 months. In the last 12 months, SunPower shares have dipped to a low of $5.84 and peaked at a high of $11.70.

SunPower Corporation (NASDAQ:SPWR)

Acquisition of switchyard

On September 25, SunPower Corporation (NASDAQ:SPWR) issued a press release stating that it had finalized the sale of the Don Héctor switchyard that links the 100-megawatt El Pelicano solar project with the Integrated Central System (SIC) of Chile.

The release said that the switchyard was acquired by Transelec S.A., the leading power transmission company in Chile. Financial details of the transaction weren’t disclosed, and this may have weighed on the stock. However, SunPower Corporation (NASDAQ:SPWR) and Transelec have undertaken investments worth $17.9 million.

Transelec is responsible for the transmission of power that lights up homes of 90% of Chileans who live between Arica and Chiloé. The company also owns 78% of the national power transmission lines in the Central Interconnected System (SIC), which is connected to the 100-megawatt El Pelicano solar project via the Don Héctor switchyard.

According to SunPower Corporation (NASDAQ:SPWR), the Don Héctor switchyard can be scaled to accommodate interconnection for future projects.

The Don Héctor lies 6.5 kilometers from the El Pelicano solar project. SPWR is developing the El Pelicano project in Chile’s La Higuera (Coquimbo Region). The project is expected to be operational by the end of 2017. When completed, the El Pelicano project will have a capacity to supply 300 gigawatt hours per year of energy. The project will serve Chile’s Metro de Santiago, the underground railway network of the city of Santiago.

Seeing value in solar power

SunPower Corporation (NASDAQ:SPWR) portrayed the acquisition of the Don Héctor switchyard by Transelec as demonstrating a view that Transelec sees value in investing in solar. Transelec sees the acquisition of Don Héctor switchyard as giving it the infrastructure necessary to transmit renewable energy as well as partake in the growth of Chile’s solar energy market.

The El Pelicano project consist of a solar power plant dubbed SunPower Oasis, which is billed as a fully-integrated, cost-effective solar deployment. SunPower Corporation (NASDAQ:SPWR) said that the SunPower Oasis features optimal land use and an efficient solar panel cleaning capability.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $SPWR and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

Ballard Power Systems Inc. (USA) (NASDAQ:BLDP) Gets Bump from Tech, Orders

Ballard Power Systems Inc. (USA) (NASDAQ:BLDP)

Ballard Power Systems Inc. (USA) (NASDAQ:BLDP) shares jumped 27% after the provider of clean energy solutions unveiled a new lightweight fuel cell that uses less platinum. The company announcing a backlog order of $264 million also appears to have triggered investor interest in the stock.

Investors Reaction

Wednesday’s rally was the biggest in more than a year, allowing the stock to achieve a new 52-week high of $4.75 a share. The rally also capped a fine run, which began late last month, which has seen the stock add more than 4% in market value.

Ballard Power Systems Inc. (USA) (NASDAQ:BLDP)
One month BLDP stock price chart

Renewed investor on Ballard Power Systems Inc. (USA) (NASDAQ:BLDP) comes on growing confidence for the positive impact the new fuel cell technology could have on the company. Up until now, fuel cell systems have hard to contend with substantial amounts of platinum which makes them extremely expensive.

Ballard Power’s new system details the use of far less precious metals which will result in an 80% decline in the amount of platinum required. According to the vice president of technology and product development, Kevin Colbow, the new Non-Precious Metal Catalysts NPMC design should be ready for use before the end of the year.

“The NPMC-based FCgen®-1040 stack represents a step-change in PEM fuel cell technology with high performance at a reduced cost. Since platinum contributes 10-to-15% of the cost of a fuel cell stack today, we are very excited about the potential cost savings NPMC technology can enable moving forward,” said Dr. Colbow.

Ballard Power Systems collaborated Nisshinbo Holdings to come up with the NPMC-based proton exchange membrane. The two are currently exploring various commercial applications of the new technology.

Growing Order Book

Separately, Ballard Power Systems Inc. (USA) (NASDAQ:BLDP) says its order backlog totaled $263.5 million as of June 30, 2017, representing the actual value of orders that customers have made a contractual commitment for. The company’s 12-month Order Book stood at $97.2 million as of June 30, 2017.

According to the Chief Executive Officer, Randall MacEwen, the strong order backlog and 12-month order book numbers underscores the company’s continued growth trajectory. The company will be hosting an Investor and Analysts Day event, where it plans to provide more information and insight on how it plans to deliver on the commitments over the next 12 months.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $BLDP and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

Mexus Gold US (OTCMKTS:MXSG) Explodes on Milestone

Mexus Gold US (OTCMKTS:MXSG)

Mexus Gold US (OTCMKTS:MXSG) rallied 60% after announcing they have started to produce, in partnership with MarMar Holdings, gold in Dore form at the Santa Elena mine In Mexico. After the milestone achievement, focus now shifts to ensuring production at 10,000 tons a day by the end of the year.

Stock Performance

Mexus Gold US (OTCMKTS:MXSG)
One month MXSG stock price chart

The news helped push the stock up the charts after it broke through a key resistance level. However, the stock is still trading at the lower end of a strong down-trend waiting to see if it will break through the $0.09 mark to affirm a strong bullish momentum.

Prior to the gold production news, Mexus Gold US (OTCMKTS:MXSG) had underperformed the overall industry after dropping from highs of $0.15 to lows of $0.05 a share. The exploration stage mining company is focused on the evaluation, acquisition, exploration, and advancement of gold and silver projects in Mexico and the western United States.

Gold Production

In August, Mexus Gold US (OTCMKTS:MXSG) produced approximately 30,000 tons of ore. The two companies expect continuous leaching and Meril Crowe processing to turn the contained values into Dore. The ore currently being placed in heap leach is believed to contain 2 grams of gold per ton with a recovery rate of 76 percent.

“The current flow rate of 50gpm will be gradually increased to 200gpm to achieve maximum processing capacity and overall production. Additional primary filters will improve flow rates and recoveries from the solution. Parallel electrowinning is being installed to trap some of the high-grade pregnant solution spot,” said Mexus Geologist Cesar Lema

Mexus Gold US (OTCMKTS:MXSG) plans to release their finances in upcoming quarterly reports. According to the Chief Executive Officer, Paul Thompson, production of gold could not have started at a better time as gold prices have surged above the $1300 an ounce mark.

In addition to the Santa Elena Mine, Mexus Gold US (OTCMKTS:MXSG) owns in partnership with MarMar Holdings a 26,000-acre property at the San Felix in Northern Mexico. The property is believed to contain gold deposits. The company also owns 6,900 acres in the Ures property where gold and copper and deposits are believed to be present.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $MXSG and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Hyperdynamics Corporation (OTCMKTS:HDYN) Shares Crash

Hyperdynamics Corporation (OTCMKTS:HDYN)

Hyperdynamics Corporation (OTCMKTS:HDYN) shares fell 93.85% after announcing it did not encounter any hydrocarbons at the Fatala-1 Exploration well in the Republic of Guinea. The news rattled investors who in return pushed the stock to this year’s lows of $0.09 a share.

Hyperdynamics Stock Sell-Off

Prior to the disappointing news, the stock had been trading in a range but has since resorted to a strong downtrend. The stock is starng at its 52-week low of $0.05 as it continues to trade in a $0.05-0.14 trading range.

The spectacular collapse does not come as a surprise as investors were expecting positive news from the well in the North West Africa nation. The stock had previously spiked from the $1.50 level to highs of $2.00 in anticipation of a positive outcome from the drilling operations

Hyperdynamics Corporation (OTCMKTS:HDYN) is a Texas-based, independent oil and gas exploration company with prospects in the Republic of Guinea. The Fatal-1 exploration well drilling project is the company’s lead project and is part of a 50-50% partnership with SAPETRO, a privately held oil and gas exploration and Product Company with assets in West and East Africa. The company also owns 100% interests in concessions of about 7,238 square miles in offshore Guinea

The company had drilled 2,897 meters of water and reached a total depth of 5,117 meters below sea level, making it the deepest water well ever drilled in Africa. Hyperdynamics says it’s drilled the well within the expected budget.

“We are very disappointed at the results of Fatala-1, considering the extremely promising geophysical data on the prospect […] in the very near future, we will be studying the results of the well and evaluating any future options we may have for further activity in Guinea,” said Ray Leonard, Hyperdynamics’ President and Chief Executive Officer.

Private Placement

Separately, Hyperdynamics Corporation (OTCMKTS:HDYN) has confirmed the completion of a private placement of the company’s securities. Each unit on offer consisted of one share of common stock and warrants for the purchase of three-quarters of a share of the company’s common stock exercisable within two years.

Gross proceeds from the offering totaled $3.7 million pending deductions of placement agent fees and other expenses pertaining to the offering.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $HDYN and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Clean Coal Technologies Inc (OTCMKTS:CCTC) Rallies On Pristine M Process Validation

Clean Coal Technologies Inc (OTCMKTS:CCTC)

Clean Coal Technologies Inc (OTCMKTS:CCTC) shares rallied 8.56%, after the clean energy company announced a receipt of deposit for the construction of a two million ton facility using its Pristine M process. The Wyoming New Energy facility, first announced in June, is to be built by Kiewit Construction.

WNEC Two Ton facility

WNEC has already entered into a financing agreement with Piper Jaffray as it seeks to raise $80 million in debt to help finance the construction the plant.

“This revenue validates our patented Pristine M technology. With the aid of our EPC contractors Kiewit, the final commercial design of the plant is expected later this year and will provide customers worldwide with the blueprint for a cleaner, more efficient and cost effective fuel,” stated Robin Eves, CEO and President of Clean Coal Technologies Inc (OTCMKTS:CCTC).

Kiewit engineers have already started work on the massive project. Over the past two months, the engineers have fine-tuned the test plant near Tulsa, OK with hot runs poised to commence over the next few days.

Pristine M Technology Validation

Renewed investor interest in Clean Coal Technologies Inc. (OTCMKTS:CCTC) comes on growing confidence of the impact the project could have on the company’s Pristine M technology. The technology is designed to convert normal coal into a cleaner burning fuel. Pristine coal products have already proved to be more efficient, less polluting and more cost effective than untreated coal.

The clean coal technology can reduce up to 90% of chemical pollutants such as sulphuric and mercury. The company has already received patent awards for the technology in Brazil and Colombia, which are key markets for the technology.

Separately, the Fifteenth Judicial Circuit in Palm Beach, Florida has overturned a jury verdict awarded to Plaintiff Yessenia Soffin and William Jordan Soffin at the expense of Clean Coal Technologies Inc. (OTCMKTS:CCTC).

“It was clear that the Plaintiffs failed to present any competent, substantial evidence in support of their outrageous claims for alleged lost profits in this case. There was absolutely no way for the jury to determine the Plaintiffs’ purported damages within a reasonable degree of certainty due to the highly speculative nature of the stock market,” said Kristen Lake Cardoso, Clean Coal Technologies Inc (OTCMKTS:CCTC) attorney

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $CCTC and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

Gulf Resources, Inc. (NASDAQ:GURE) Regulatory Scrutiny Rattles Investors

Gulf Resources, Inc. (NASDAQ:GURE)

Gulf Resources, Inc. (NASDAQ:GURE) felt the wrath of Wall Street after announcing the closure of its Bromine, crude salt and chemical Chinese factories for rectification and improvement. The stock came under immense selling pressure, dropping 17.9% to end Thursday’s trading session at $1.64 a share.

Gulf Resources, Inc. (NASDAQ:GURE)
One month GURE stock price chart

Stock Sell Off

The sell-off saw the stock drop from highs of $2.00 after having rallied by more than 20% last month. The stock is currently trading in a $1.60 – $2.00 trading range. A close below the trading range could see the stock end up around the 52-week low of $1.53 a share.

Gulf Resources, Inc. (NASDAQ:GURE) is a holding company that specializes in the manufacture and sale of bromine and crude salt used in oil and gas field exploration. A sell-off of the stock comes to growing concerns about the potential impact of increased government scrutiny on the company.

Regulatory Scrutiny

Early last month, Gulf Resources, Inc. (NASDAQ:GURE) warned that a move by the government to enforce stringent environmental rules could significantly hurt its operations and earnings. The company’s subsidiaries, Shouguang City Haoyuan Chemical Company Limited, and Shouguang Yuxin Chemical Industry Co., Limited have since received letters from Yangkou County, Shouguang City.

In the letter, the local authorities order the immediate shutdown of the company’s production facilities pending rectification and improvements in accordance with new safety and environmental protection. The order comes even on Gulf Resources reiterating that its facilities were fully compliant.

“These are very interesting business situation,” Mr. Liu Xiaoping, the CEO of Gulf Resources, Inc. (NASDAQ:GURE) stated. “With most of the factories in industries such as mining and chemicals closed, there will be many people unemployed. In addition, these basic industries provide products for downstream industries. If they cannot produce products, downstream industries will also have to close.

Shutdown Impact

Gulf Resources, Inc. (NASDAQ:GURE) is currently in discussion with the local authorities as it seeks to resolve the standoff. The company says it might have to purchase new equipment and utilize modern technology, with respect to its bromine production, if it is to meet the environmental requirements.

Investments in new equipment for better waste water treatment among other investments could cost the company between $15 and $30 million. However, it remains unclear the kind of impact the shutdown will have on earnings and capital expenses.

The Chief Executive Officer is confident that the Chinese government will move with speed to complete inspections and agree on the necessary remediation and upgrading.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $GURE and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.