Green Energy Resources (PinkSheets: GRGR, GRGR message board or GRGR.PK) is a small cap wood fiber fuel supplier. The company is really nothing special and it doesn't even bother to report with the SEC. However recent news has put some positive spin on their stock price as Green Energy might be getting quite some contract.
On Wednesday Indian power issued a LOI, which suggests that the company may be buying up to 7.2 million tons of woodchip from Green Energy. Valued at $576 million per year this contract would become a goldmine for Green Energy, however there are some substantial issues that stand in the way.
First off, as mentioned before, Green Energy is a small company, so supplying large amount in a timely manner could make their lives very difficult. Secondly, the whole deal seems fishy as there are many companies that would be better suited for this contract.
Anyways, a letter of intent is not a real deal, and so it will not create any substantial and lasting effects on the company's stock price. During Thursday's trading session the share price already failed to continue the rally, which was mostly influenced by their default on another agreement.
Green Energy had an outstanding agreement with Ogdensburg Bridge and Port Authority to handle and store wood chips. The company however failed to provide public liability and property damage insurance, which lead to a violation of this contract.
The project with Authority was valued somewhat at $20 million and the company screwed it up. I wonder how they would manage to take care of a half a billion worth of project. This is just unreliable.
Reference:
User comments
Follow the discusion about Green Energy Res in the forum