CleanSpark Inc (OTCMKTS:CLSK) is rising from the dead after a period of underperformance depicted by share price implosion. The stock has bounced back after shedding more than 60% in the market in the last quarter of 2018.
Catalyst And Share Price Analysis
The acquisition of Pioneer Power Solutions subsidiary, Pioneer Critical Power Inc., is the catalyst fuelling the bounce back from all-time lows. The company has also received a number of business orders to a tune of more than $1 million that continues to strengthen its revenue base.
A 50% plus spike since the start of the year attests to renewed and strengthening investor confidence in the stock. With the stock resorting to trading in an uptrend, in recent weeks, it is becoming increasingly clear that short sellers are slowly losing control.
After the recent spike, the stock is staring at the $3 a share level, which happens to be the immediate resistance level. A rally followed by a close above the critical resistance level should reaffirm the emerging uptrend, setting the stage for the stock to continue climbing the ladder.
Above the critical resistance level, the stock should make a run for the $4 a share level, the next resistance level. Below the $3 a share level, short sellers remain in control given the long-term bear trend. However, if recent price action activity is anything to go by, then CleanSpark is on its way to trading higher.
CleanSpark is a developer of clean energy software and control technology, designed to address modern energy challenges. The company offers services on intelligent energy, monitoring, and controls as well as microgrid consulting services.
Pioneer Critical Acquisition
The acquisition of Pioneer Critical Power is the spark that has reinvigorated CleanSpark sentiments and prospects in the market. With the acquisition, the company gains access to a series of safety files as well as certified designs for low voltage switchgear and automatic transfer switches.
The files will allow CleanSpark to manufacture and market industry certified designs, related to low voltage power equipment. They should also enhance the company’s microgrid business as well as accelerate its efforts in capturing substantial market share in the dynamic market.
Under the terms of the agreement, Pioneer Critical will retain and continue operating its engine generator business.
“We believe that CleanSpark will be able to derive significant incremental value from these intellectual property assets, beyond what Pioneer has generated, and the receipt of CleanSpark equity represents an attractive upside opportunity for Pioneer and its shareholders,” said Nathan Mazurek, Pioneer’s Chairman and Chief Executive Officer.
Growing Business Orders
The acquisition of Pioneer Critical Power comes on the heels of CleanSpark executing an agreement for an $18.3 million deal with an S&P 500 member. The agreement is for the provision of engineering design and consultation services for the installation of a microgrid system. In addition, the company is nearing completion of a $900,000 contract for the installation of a turnkey advanced microgrid system at a U.S Marine Corps Base in Pendleton.
CleanSpark has also set sights on the Marijuana sector in pursuit of sales opportunities for its energy solutions. The company has already designed a microgrid solution for cannabis facilities. The new solution if deployed will allow cannabis companies to reduce monthly electricity bill in their greenhouses by up to 82%, on deploying utilizing solar energy.
“Impulse software is capable of virtually eliminating the demand charges that can account for almost 50% of the utility charges for such a facility. Effectively, we designed a ‘best-in-class’ solution for the Cannabis market to meet the significant and growing energy demands of the industry, CleanSpark in a statement.
CleanSpark has positioned itself to take advantage of remarkable opportunities in the energy sector. The fact that the company possesses a unique technology portfolio with a unique post-acquisition structure affirms its long-term prospects as it continues to pursue rapid growth.
Recent price action activity indicates that investors have started taking note of the company’s growth prospects as it continues to pursue opportunities in the energy sector. After underperforming in 2018, the stock has begun rising from the dead supported by improving fundamentals.
For early movers eyeing opportunities in the energy sector, now may be the time to get in on the stock as momentum looks to be building for a major breakout.
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Disclosure: We have no position in CLSK and have not been compensated for this article.