What happened
Shares in an electricity and natural gas retailer Just Energy Group (OTC: I) were down 15% as of 1:25 p.m. EST Tuesday. The Canadian company also serves 10 US states, including Texas, and the energy sector disruption caused by a severe winter storm and freezing temperatures had a direct impact on the business.
So what
Just Energy announced today that due to the storm-related disruption, it will have to delay filing the financial statements and other required reporting documents due on Tuesday, February 16. The company also said it has implemented a lock-up of company shares for its directors and officers until the required documents are filed.
Just Energy said surging demand and power outages in Texas forced the company to “balance the supply of electricity at very high compensation prices” through the independent power grid operator. of Texas, Electric Reliability Council of Texas (ERCOT).
Image source: Getty Images.
Now what
Just Energy said the weather event “could have a positive or negative financial impact on the business, which could be substantial.” Investors seem to believe that the impact will be negative as it has to purchase electricity at temporarily high tariffs to meet its obligations to its customers.
The company said it is now assessing the financial impacts and cannot finalize its reporting documents until it can reasonably estimate how this will affect its financial position. Investors today are not waiting to find out, as it seems more likely that negative news will result from the valuation.
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