Pelosi & Pickens are not Catalysts for investing in CLNE!!
I'm looking at this company that Jim Cramer has been pumping and pumping for what seems like 2 weeks straight now (last week and yesterday). This stock is T. Boon Picken's Clean Energy Corp (CLNE). T Boone Pickens is invested in it buying close to 4,000 shares back in January of this year... Nancy Pelosi and her husband are also invested in it.
CLNE has yet to do anything except report bigger and bigger losses and sustain bigger and bigger debt.
Granted.. I'm not a moron and I am well aware that a company like CLNE peddaling Natural Gas for transportation is a very appealing opportunity for investors who believe natural gas is the future for car/truck/vehicle travel. I know how appealing and wonderful and Wizard of OZ that story sounds.
But my question is.... When this stock has done nothing to earn a higher P/E Multiple than where it was trading at 1st week of July, why on EARTH is this thing skyrocketing?
Between 1st week of July and now about the only significant news are 2 tid bits:
1) A piece of legislation that may or may not see the light of day this year or next or anytime that benefits the stock by investing in Natural Gas Transportation as an alternative energy among many other alternatives part of the legislation in Congress.
Put it this way.... That piece of legislation floating around will not come into fruition this year. It just won't. This is madness to think that the legislation will look anything like it does today by the time it reaches John McCain or Barack Obama (who ever becomes President).
It ain't going to touch the Resolute Desk this year.... We have had a Lame Duck Congress to go along with a Lame Duck Executive Branch since January. I see that trend continuing.
So investors are getting all excited over what? Over a complete MYSTERY as to what in the world anyone should be excited over!
2) CLNE spent over 19 million in acquiring a Natural Gas asset....
Yippe. It also has basically placed a bigger burdon on itself taking out a 30 million dollar credit to finance this acquisition this month. CLNE has a bigger burdon creating a much lengthier time frame to produce a profit. The congressional legislation if it passes as written today will not single handidly put CLNE into posiitve cash flow, profitibility.
The time frame is soooooooo long for CLNE and other companies like it to be profitable that we are looking at no earlier than 2010... And that's on pure luck that State Governments along with the Federal Government just hold hands in harmony and sing praises on Natural Gas transportation.
Do investors actually *think*? Think that $17 going on $18 a share for a company that hasn't yet seen anything but ever increasing debt and losses is a good entry point?
This is madness. I'd wait this one back down to $12 before I pulled the trigger. Unfortunately the JIM CRAMER effect is going to propel this thing into orbit for a few more days. When everyone wakes the heck up out in Wall Street expect a HUGE price adjustment to the downside.
Is this a bad investment? No.... It is a good investment... Just not now and probably not even next year.
I'm underperforming CLNE starting today and I don't care that I will sustain some big hits to my caps score in the early going.