Shares of New Fortress Energy (NASDAQ: NFE) fell on Wednesday. The company’s stock plummeted 14.5% as of market close. The leg down comes as the S&P 500 (SNPINDEX: ^GSPC) and the Nasdaq Composite (NASDAQINDEX: ^IXIC) lost 1.6% and 1.4%, respectively.
New Fortress is excluded from Puerto Rico
The liquefied natural gas (LNG) company will not be able to take part in a key government auction in Puerto Rico. It was revealed late yesterday that New Fortress has been disqualified from a Puerto Rican government auction to secure temporary power generation, according to reports. New Fortress had bid on an 800-megawatt contract aimed at stabilizing the U.S. commonwealth’s unreliable electric grid.
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The company has sent a letter to Puerto Rico Governor Jenniffer González-Colón requesting reconsideration, but the initial news was enough to send New Fortress Energy’s stock lower, especially given recent developments for New Fortress.
Image source: Getty Images.
The news comes just after the embattled energy company announced its Q1 results, which failed to meet Wall Street’s already weak targets. The company also announced it had sold its Jamaican LNG import terminal in Montego Bay in a $1 billion deal. While the deal nets a significant lump sum, it’s a major hit to its future revenues.
The company’s bad credit is getting worse
Today’s news further hurt the company’s credit rating, an ongoing issue for the heavily leveraged company. This stock is not one you want to own. There are too many issues facing New Fortress Energy, with no compelling case for a turnaround for the foreseeable future.
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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
