A hét részvénye: Polarcus (Angol hír)

• Polarcus gained over 200% on Tuesday and Wednesday

• Stock defaulted on its obligations

• Company is in provisional liquidation

• Recent price gains look like a dead cat bounce

Share price of Polarcus (PLCS.NO) has been very active recently. Stock jumped over 200% on Tuesday and Wednesday combined. However, the company has recently defaulted on its obligations recently. Let's take a look at recent news on Polarcus and see whether ongoing price gains are just a dead cat bounce or whether there is an explanation.

Polarcus has been struggling for a long time. While revenue started to pick-up in 2018 and 2019, the coronavirus pandemic has destroyed demand. Company has struggled to turn in profits in recent quarters. Source: Bloomberg, XTB

Overview

Polarcus is a United Arab Emirates-headquartered company that specializes in conducting seismic surveys. The company operates a fleet of seismic research vessels but has struggled amid collapse of energy markets in 2020. Industry has been struggling in recent years as oil & gas exploration spending continues to decline. Oil prices remain relatively low following price plunge in 2020 and energy companies continue to delay new exploration projects. In turn, companies like Polarcus see depressed demand for their services and poor outlook going forward. As time passed, Polarcus' financial position continued to worsen.

Default

Polarcus experienced a massive share price crash two weeks ago. Company announced that it has defaulted on repayment of $25 million of working capital facility after banks declined to extend repayment deadline. As a result, the company also defaulted on other loans and bonds. Company had $415.7 million in outstanding debt by the end of third quarter 2020 (most recent financial data). Lenders have ordered Polarcus to discontinue operations and sail 6 of its vessels to ports to prepare them for sale. Company has also announced that it will terminate contracts with all employees.

Recent gains

As we can see, recent news flow has been very pessimistic. The company has entered provisional liquidation and chances for it to continue to operate as a going concern look slim.  Having said that, recent price gains should be treated with caution. It looks like a pure speculation being in play here as the company bankrupted and its fundamental value is near-zero. It looks highly likely that the share price will pull back towards recent lows and continue to trade on these levels. Traders can take a look at Wirecard (WDI.DE) chart for hints and similarities - German payments company has also bankrupted and its share price plunged. Wirecard shares experienced massive speculative demand at the turn of 2020 and 2021, gaining over 300% in a matter of days. However, most of these gains have been erased since and stock continued to trade at depressed valuation.

Polarcus (PLCS.NO) is trading 70% year-to-date lower. The company has over 200% on Tuesday and Wednesday this week. However, advance was halted by the price zone at  0.25 and the downward move has resumed today. As the company has defaulted on its obligations and chances of continuing as a going concern are slim, fundamentals support a pullback towards recent lows.Source: xStation5