LNG Share Price up a Whopping 25%, Then Back Down 9.49%

Liquefied Natural Gas Ltd’s share price [ASX:LNG] soared by nearly 30% yesterday in morning trading, despite announcing it would be delisting itself from the ASX to list in the US instead.

But then today, it dropped back down by nearly 10%, most likely after Aussie investors realised what the delisting would mean for them.

At time of writing, LNG’s share price is sitting at $0.27AUD.

What’s the story?

Upon reviewing its strategy, the LNG Board of Directors has decided to re-domicile the company to the US. Investors initially responded to this update positively, perhaps feeling like there was still some goodness to be rung out of the stock before it reached other shores.

LNG’s leaders are positive that this decision will support the company in raising new capital to fuel its business and marketing engine.

But today, the share price has fallen. Despite yesterday’s positive upswing, the share price has been reported to be down 42% for the year.

Should we be concerned about LNG?

Though yesterday’s lift might have been an inspiring surprise, it seems unlikely that many investors will want to get on board of a company on the cusp of delisting.

How long this will take, though, is anyone’s guess. It depends on the length of the regulatory processes in both the US and Australia, which could involve quite a bit of back and forth. The company has also revealed that the availability of court dates in Australia will also need to be taken into consideration.

CEO Greg Vesey said that the company expects the re-domicile transaction to be complete later on this year or, at least, by early 2020.

On the back of a blank future down under, it could be wise to steer clear of this one.

Regards, 

Ryan Dinse
For Money Morning

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Ryan Dinse is an Editor at Money Morning. He has worked in finance and investing for the past two decades as a financial planner, senior credit analyst, equity trader and fintech entrepreneur. With an academic background in economics, he believes that the key to making good investments is investing appropriately at each stage of the economic cycle. Different market conditions provide different opportunities. Ryan combines fundamental, technical and economic analysis with the goal of making sure you are in the right investments at the right time.  


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