NEW YORK, April 11 - Shares in Clean Energy Fuels (CLNE.O), the natural gas company controlled by energy tycoon T.Boone Pickens, are likely to drop at least 30 percent due to its high valuation and an upcoming dilution of its share base, according to financial weekly Barron's.
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The paper, in its April 12 edition, said that Clean Energy's healthy business prospects have already been more than priced into the company's recent valuation at 45 times 2010 cash flow and 20 times average forecasts for 2011 -- about double the multiples of some rival companies.
Shareholders of Clean Energy can expect to get massively diluted as management has plenty of stock options and warrants hanging over the company will dilute earnings almost 30 percent.
The warrants include some that Pickens must exercise before 2012 or lose a profit of $150 million.
Stocks | Utilities
The paper, in its April 12 edition, said that Clean Energy's healthy business prospects have already been more than priced into the company's recent valuation at 45 times 2010 cash flow and 20 times average forecasts for 2011 -- about double the multiples of some rival companies.
Shareholders of Clean Energy can expect to get massively diluted as management has plenty of stock options and warrants hanging over the company will dilute earnings almost 30 percent.
The warrants include some that Pickens must exercise before 2012 or lose a profit of $150 million.
