Why Uranium Energy Corp. Shares Are In Freefall Today

Uranium Energy Corp. UEC shares are trading lower after Kerrisdale Capital issued a short report on the stock.

What to Know: On Thursday, Kerrisdale Capital released a report via Twitter stating that Uranium Energy Corp. is managed more like “a penny-stock pump-and-dump than a legitimate mining company.”

Since the company entered the uranium business in 2005, UEC has mined and sold about half a million pounds of uranium. Kerrisdale alleges that most effort at UEC has been put into selling $465 million worth of stock – not including its IPO.

Uranium Energy paid, “directly or indirectly, approximately 30 different entities to publicize its stock.” Some of these stock promoters were even founded by UEC’s CEO, Amir Adnani.

Kerrisdale does not believe UEC’s fundamentals align with the stock's market value. Kerrisdale estimates that UEC is worth less than a third of its current $1.2 billion market capitalization, and assigns a fair value per share of $0.96. Currently, the stock has a 50-day moving average of $3.71.

“Uranium Energy Corp isn’t really a company designed to mine and deliver uranium energy; rather, it’s a vehicle built to fool unscrupulous investors into buying massively overvalued shares of a stock promotion principally intended to enrich Adnani and insiders,” Kerrisdale Capital states in their report.

Uranium Energy Corp is engaged in uranium mining and related activities on uranium projects located in the United States and Paraguay, including exploration, pre-extraction, extraction, and processing.

According to data from Benzinga Pro, Uranium Energy Corp. shares were down 11.8%, trading at $2.82 at the time of publication. The stock has a 52-week high of $6.56 and a 52-week low of $2.93.