Late last week, as shares of Lucas Energy, Inc. (NYSEMKT:LEI) were trading over 330% over their previous day’s close, I wrote an article stating that I believed the recent acquisition that the company had made did not justify the huge stock jump that we had seen. After all, Lucas Energy, Inc. (NYSEMKT:LEI) was basically diluting their shares at a high rate in order to afford their purchase of resource-rich land.
This morning, shares of Lucas Energy, Inc. (NYSEMKT:LEI) are trading down over 12% in the pre-market after investment analyst, Joel Musante of Euro Pacific agreed with my accessment and downgraded the stock to a “sell”, after he said that he believes that even with an optimistic view, the acquisitions were only worthy of about one quarter of the proposed price.
It should be interesting to see how shares of Lucas Energy, Inc. (NYSEMKT:LEI) perform today. Undoubtedly there will be a lot of shorting going on. The question that remains is; will the longs or the shorts win out?
The stock increased 335.76% or $5.54 on January 4, hitting $7.19. About 10,673 shares traded hands. LEI has risen 4462.50% since May 29, 2015 and is uptrending. It has outperformed the S&P500 by 4464.62%.
Lucas Energy, Inc. is an independent gas and oil company. The company has a market cap of $10.70 million. The Firm is engaged in the acquisition and development of natural gas and crude oil from various known productive geological formations, including the Austin Chalk, Eagle Ford and Buda formations, primarily in Gonzales, Wilson and Karnes Counties south of the city of San Antonio; and the Eaglebine, Buda, and Glen Rose formations in Leon and Madison Counties north of the city of Houston, Texas. It currently has negative earnings. The Firm has leasehold interests (working interests) in approximately 17,628 gross acres, or 13,314 net acres.