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Blue Sphere Corporation (OTCMKTS:BLSP) Skyrockets 58%, What Next?

Blue Sphere Corporation (OTCMKTS:BLSP) Skyrockets 58%, What Next?
Written by
Jim Bloom
Published on
December 17, 2018
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Shares of Blue Sphere Corporation (OTCMKTS:BLSP) surged 58%, recouping a small percentage of the losses accrued for the better part of the year. The stock is still down for the year, despite the recent resurgence, having lost more than 95% in market value.

Blue Sphere Corporation Price Analysis

The stock’s sell-off does not come as a surprise. The independent power producer has failed to issue press releases and updates highly needed to validate the company’s long-term prospects. The lack of such crucial updates has all but dealt investors’ confidence in the stock a big blow.The stock is currently languishing at all-time lows despite the huge turnover of traded shares that accompanied the recent rally. The recent spike higher could be a signal of a potential trade brewing. BLSP Daily ChartAfter feeling the full force of short sellers, the stock is currently languishing at the $0.0026 level and in dire need of new catalysts to support upward movements. The stock opened the year at the $1.74 mark. What this means is that the stock faces an uphill task to recoup the huge losses accrued despite the recent surge.For the stock to emerge as a bounce-back play, after the recent sell-off, it first needs to rise and stabilize above the $0.01 mark, a key psychological level. Below the key level, the stock remains susceptible to further declines given the steep underlying downtrend and the fact that short sellers are still in firm control.

What Does Blue Sphere Corporation Do?

Blue Sphere Corporation casts itself as an international Independent power producer. The company specializes in transforming millions of tons of agricultural, municipal and industrial waste into sustainable clean energy. The company converts harmful materials into sustainable clean energy thus helping alleviate the release of damaging greenhouse gases.

Recent Developments

Blue Sphere Corporation is a shadow of its glory years as investors have continued to shun the company on the lack of substantial updates needed to gauge operational efficiency and growth prospects. The last piece of information about the company came in October when the campy provided an update about its operations in Italy.The independent power producer maintains it is on course to start producing clean energy in Udine Italy. The company says it is in the process of updating its natural oil generator facility in Udine having purchased a Mitsubishi 4-cycle Water-called turbocharged inline 6. The new engine is poised to increase the facility’s top-end revenue performance by 2%.

"We are very excited to continue making improvements in our Italian facilities. These investments in upgrading our engines provide us with a strong outlook for performance for years to come,” said CEO Shlomi Palas.

In addition to the Udine facility upgrade, Blue Sphere Corporation says it has on its portfolio 13 plants under development phase, with a potential capacity of 65.4MW. The collection is made up of seven Italian plants made up of four acquisition deals as well as three new constructions.In the United Kingdom, the company has three plants able to produce 36MW. The portfolio also consists of one Canadian plant totaling 7.6MW and one Israeli plant totaling 2.5 MW as well as 1 U.S plant totaling 7.3 MW.

Financial Results

Blue Sphere Corporation is yet to release financial results for the current fiscal year. For the 2017 fiscal year, the company says it generated revenues of $17.4 million up from revenues of $12.8 million reported in 2016. The increase was because of the consolidation of four operating facilities in Italy.However, the company spooked investors on reporting a net loss of -$3.9 million for the year ended 31 December 2017. The net loss was more than double a net loss of -$1.8 million reported the prior year. The increase in net loss was because of the extinguishment of a short-term loan worth $2.1 million as well as a debenture of $2.1 million. A gross profit of $1 million helped offset part of the loss.

Bottom Line

Amidst the recent spike higher, Blue Sphere Corporation outlook does not look good. The stock is still languishing at all-time low investor’s sentiments and confidence has dropped to record lows. The CEO acknowledging that 2018 has been a challenging year also arouses serious concerns about the company’s operational efficiency and long-term prospects. After the recent spike higher, it might be wise to wait for further confirmation to confirm a potential change in direction of trade.We will be updating our subscribers as soon as we know more. For the latest updates on BLSP, sign up below!Disclosure: We have no position in BLSP and have not been compensated for this article.

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