Evergreen Energy’s Wishful Thinking Announcement (EEE)

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So, your company’s stock is trading at nearly 90% below its 52-week high, and estimates for the current quarter point to a continued loss. What do you do? If you’re Evergreen Energy (NYSE: EEE), you adopt a poison pill.

Yesterday, the company’s stockholders approved a plan that gives currentshareholders the right to purchase a new series of preferred stock "inthe event of an unsolicited takeover bid." Institutions and insidershold about 70% of the company’s float, and by golly they are going tohold onto them even now that the stock is going for $0.33/share. The52-week high is $3.25, and the all time high is about $18.50.

The company has developed a process to produce cleaner-burning fuelfrom low-grade sub-bituminous and lignite coals. You’d think with theclamor for clean-burning coal that Evergreen would be doing better.The problem appears to be long-term debt of more than $97 million,coupled with negative cash flow.

There’s got to be a big line of potential takeover artists just drooling to get their hands on this baby. Or not.

Paul Ausick
December 5, 2008