Initiation of coverage by the JournalTranscript.com has put the ForceField Energy Inc (NASDAQ:FNRG) in the limelight. The stock price of the distributor and installer of light-emitting diode (LED) rushed up by 0.53% to $7.53 during the last trading session, when the average volume stood at 51,438 shares.
Sale of interest in TPE
Last month, ForceField Energy Inc (NASDAQ:FNRG) had successfully concluded the stake sale of its 50.3% interest in TransPacific Energy Inc. (TPE). The company has sold the stake to certain existing as well as former shareholders of TransPacific, where the total consideration was valued nearly $2 million. Such consideration included $50,000 in cash and return of nearly 255,000 shares valued at $7.49 per share of ForceField by the shareholders of TPE.
The share price represented the immediate closing price of the stock as on March 5, 2015. ForceField Energy Inc (NASDAQ:FNRG) has effectively reduced its share count to roughly 18.45 million shares from 18.7 million by returning 255,000 received shares back to the Treasury.
Focus on core segment
These shares were issued by the company in June 2012, when it has acquired a 50.3% stake in TPE. The JournalTranscript.com sees a value returning to the company following the stake sale. The total consideration received by ForceField Energy Inc (NASDAQ:FNRG) now is in excess of $500,000 that it paid to purchase the interest in 2012.
Moreover, the sale of interest denoted the company’s commitment to stay focused on monetizing near-term opportunities present in the multi-billion worth LED market. With the sale of interest, ForceField Energy Inc (NASDAQ:FNRG) stands to have divested completely from the ‘ORC waste heat’ division of its business portfolio.
The divestment will now help ForceField Energy Inc (NASDAQ:FNRG) to employ its capital towards LED projects and support other pending proposals. Also, the divestment will help the company to expand its profitable LED segment through scaling up product capabilities along with regional presence. The company is confident that its plans will reflect in revenue growth, operating margins as well as return on capital.