Unfortunately LNC share price today is down 80% from a year ago, because it is tagged as a clean energy, and is in the dumpster with other CSG/UCG stocks; CNX, DTE etc. The shorters have done well, can’t fault their investment strategy to date.
But LNC has options, for one it could restore shareholder value (and instantly damage the shorters) by putting us on a trading halt and announcing that LNC be split into three separately listed companies. This will remove the negative market valuation (probably more than LNC’s current market cap) imposed on LNC by Clean Coal, unlocking shareholder while minimising our risk. Promoting greater transparency of cost structures across each listed entity will allow us to scrutinise cross-subsidisation and costs better.
That is the only way LNC can properly grow, with each of the divisions trading at full value by having their own clear strategy and resources, an equity raise won't be a problem. LNC for the first time has CEO potential leaders in each division. As Steve Jobs, would do, keep it simple, let’s focus on the product with the greatest potential, Umiat, fund this internally with cash flow from oil and gas by ramping up Wyoming and Gulf Coast via closed loop systems, and then prioritise the rest down. With Coal under Michael Mapp, has a unique asset base, a known programme of work and will do well and be better appreciated by the market.
UCG-GTL Clean coal techonology is now ready for commercialization with gasifier 5 complete; it’s the perfect time for Clean Coal to stand on its own legs. Let Golden Concord be the proof in the pudding, if deal falls over, could Peter Bond actually improve the share price of LNC by ceasing all cash burn in relation to clean coal immediately or by having that division floated separately? What are your thoughts?
Every AGM it’s all about the technology being the centrepiece of his vision and LNC’s legacy, but at what cost to shareholder value? Given the majority of R&D is already spent, it’s time to maintain a leaner clean coal team, minimise footprint, crank up their sales efforts to ensure its own survival. There’s no better motivation than that, and maybe then the institutional investors will once again be ‘sticky’ again to LNC, as sticky as oil.
LNC Price at posting:
60.0¢ Sentiment: Buy Disclosure: Held
