Yesterday was a rough day for Camber Energy (NYSEAMERICAN: CEI), with the stock falling 3.70% by the closing bell – but that’s good news. I know, you’re probably thinking, “Josh, you’re crazy, nothing about CEI stock falling is good news,” but I’m here to tell you otherwise. After all, yesterday’s declines only expand the potential opportunity.
The Viking Energy Merger Is Coming
I’ve written two articles about the fact that the storm clouds hanging over the merger between Camber Energy and Viking Energy have dissipated. So, I’m not going to spend too much time here. The simple fact is that this merger is likely to take place – and soon. If you’d like more details as to why I believe the merger is a no-brainer, click here and/or here.
Today, we’re going to focus on what this merger means for shareholders.
So, What Does the Merger Mean for Camber Energy Shareholders?
The merger between Viking Energy and Camber Energy is great news all around – especially when you dig into the financials. Let’s start with one of the most important numbers, shareholders equity.
To determine shareholders equity, you need to subtract a company’s liabilities from the value of its assets owned. The remainder is equity, much like your home’s equity is determined by subtracting the amount of money you owe on your mortgage from the total value of your home.
When it comes to Camber Energy, shareholders equity was about -$17.12 million as of December 2022, which included an approximate $7.6 million derivative liability component associated with Camber’s remaining Series C Pref. Stock which is a fraction of the previously outstanding amount Viking Energy’s shareholders equity was positive as of December 2022, meaning on the closing of the merger Camber’s negative equity will be a thing of the past. Further, as the remaining Series C Pref. Stock is extinguished the derivative liability component will decrease, thus increasing Camber’s shareholders equity.
The difference in revenue is also monumental.
In 2022, Viking Energy produced about $24 million in revenue while Camber Energy produced about $597,260. During the year, Camber lost about $11.16 per share while Viking’s loss was just $0.13 for the year. So, losses are likely to shrink drastically, and with the combined assets and capabilities, the two companies may be able to squeak out a profit in the near-to-mid term.
The Bottom Line
The bottom line here is simple. All signs suggest the merger investors have been waiting for between Camber Energy and Viking Energy will be taking place within the coming months. When this happens, CEI, the surviving company, will have plenty of shareholders equity on its books, revenue worth writing home about, and a path to profitability with far fewer bumps in the road. That’s enough to excite just about any investor!
Article Resources
- https://ycharts.com/companies/CEI/shareholders_equity
- https://www.alphaquery.com/stock/VKTX/fundamentals/quarterly/shareholders-equity
- https://www.macrotrends.net/stocks/charts/VKIN/viking-energy/revenue
- https://www.marketwatch.com/investing/stock/cei/financials
- https://finance.yahoo.com/quote/CEI/financials?p=CEI
- https://www.macrotrends.net/stocks/charts/VKIN/viking-energy/eps-earnings-per-share-diluted
Disclosure: CNA Finance is not an investment advisor or broker-dealer. This article was written by Joshua Rodriguez and expresses his personal opinion of Camber Energy but should not be construed as a solicitation to buy, sell, or otherwise trade any specific security. This is a sponsored article and should not be considered investment advice. Investing comes with risk and CNA Finance strongly advises investors to seek advice from licensed professionals before making any investment decisions.