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New Fortress Energy Stock Soared 11.3% Today -- Here's Why
Key Points
Key government officials from Puerto Rico spoke to the press on Tuesday, expressing support for New Fortress Energy's supply contract.
Earlier this week, the contract received conditional approval from the Financial Oversight and Management Board after an intense review.
Shares of New Fortress Energy (NASDAQ: NFE) rose on Wednesday, finishing up 11.3%. The jump came as the S&P 500 and Nasdaq Composite ticked up 0.3% and 0.1%, respectively.
Puerto Rican officials, including the island's Energy Czar, told reporters that residents could expect lower energy prices once a deal with New Fortress Energy was finalized.
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Officials say the NFE deal is a key step forward
A day after New Fortress received the Financial Oversight and Management Board's (FOMB) conditional blessing to supply Puerto Rico with liquified natural gas (LNG), officials from the governor's office expressed their support for the deal, calling it "a key step toward system stability."
Image source: Getty Images.
The verbal support was welcomed by investors, given that the FOMB's approval is not final. If New Fortress can't meet the additional conditions, it may mean going back to the negotiating table, something the company cannot afford at this point.
Bankruptcy is still a possibility
New Fortress is teetering on the brink of ruin, with significant debt that it is struggling to service. It was given a temporary reprieve by its creditors, but that ends December 15th when it must resume interest payments. A finalized deal would help the company meet these obligations, but the risk of bankruptcy remains.
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.