Blue Earth Inc (NASDAQ:BBLU) skyrocketed 243% at its current daily high and is now settling down but still up 118% from its prior day close. Volume has exploded to over 16.24 million shares trading hands…almost 19x times its average volume. BBLU has staged a sharp reversal since hitting a 52-week low at the beginning of March and is now up over 321% since putting in the low.
BBLU has been attempting to restructure its debt since it had received a Notice of Default from its principal shareholder and the senior lender to the company. JIG (Jackson Investment Group) is the company that issued the default notice. BBLUE failed to make interest payment on 15% Senior Secured Note due back in Feb 2016.
BBLU will need to enter negotiations with debt holders in order to stave off a bankruptcy. It has had and expects to continue to have debt restructuring talks and negotiations to come attempt to come up with a solution that is favorable to all stakeholders. Given the surge in the stock price, there could be news on the horizon…otherwise it is just shorts covering their position before BBLU enters bankruptcy.
The financial performance of the BBLU does not look to promising. It has over $21 million in debt and payables with only $620k in cash. The situation seems pretty dire and it may seem that the company will be worth more through a bankruptcy and restructuring then it is today.
BBLU is a provider of energy efficiency and alternative/renewable energy solutions for small and medium sized commercial and industrial facilities. It operates in two segments: construction of alternative energy facilities and energy efficiency remediation. BBLU revenues have declined significantly in the most recent sequential quarters and will likely face continued pressure. It has negative earnings according to its most recent quarter results. BBLU debt to equity has skyrocketed to unsustainable levels of 16.77 and is operating at a negative EBITDA.
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BBLU is currently trading at a $24.51 million market valuation. It is currently trading at less than 1 times annual sales and has significant pressure coming from debt holders who have issued a Notice of Default. If it is able to restructure its debts, BBLU will skyrocket through the stratosphere. Only time will tell what will happen with this exciting story. Stay tuned for more information.
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Disclosure: we hold no position in BBLU either long or short and we have not been compensated for this article.