FISHERS, IN - American Resources (NASDAQ:AREC) Corporation (NASDAQ:AREC), a supplier of rare earth elements and carbon materials, has publicly denied allegations of issuing equity at a significantly reduced price, as suggested by online speculation. Mark Jensen, CEO of the company, labeled the claims as "entirely false" and harmful to shareholders.
The rumors, which surfaced in online chat rooms, suggested that American Resources was issuing 20 million shares at 48 cents each. The company has taken steps to address the situation by notifying legal counsel and filing a complaint with the SEC and NASDAQ to investigate the misleading posts and their impact on the stock's trading activity.
Jensen condemned the spread of false information as "nefarious" and "manipulative," and expressed concern over the practice of naked short selling, urging regulators to investigate such market activities. He emphasized that American Resources is not raising capital at the alleged price and is instead focusing on growth through non-dilutive capital and leveraging its assets and partnerships.
The company, which operates in the Central Appalachian basin, is known for supplying materials for steelmaking and the electrification market, as well as for its environmentally responsible approach. American Resources prides itself on a low-cost business model aimed at scaling operations to meet the demands of the global infrastructure and electrification markets.
Despite the recent distractions caused by the false information, Jensen remains optimistic about the company's divisions and their positioning in the market, believing that their execution will ultimately reflect in the company's share price.
This statement comes amidst a volatile period for the stock, as the company seeks to clarify its financial strategies and reassure investors of its commitment to growth without equity dilution. The information in this article is based on a press release statement from American Resources Corporation.
In other recent news, American Resources Corporation has released its first quarter 2024 earnings call, revealing strategic developments. The company plans to spin off its subsidiaries, American Carbon Corporation and ReElement Technology Corporation, by the end of the year. Additionally, American Resources is advancing its expansion into the Jamaican iron ore market and enhancing its refining capabilities.
CEO Mark Jensen emphasized the cost-effectiveness and environmental focus of their refining technology. He also highlighted the company's acceptance into the Defense Industrial Base Consortium, which allows for defense sector bidding. Jensen also noted that American Resources has invested $20 million in Wyoming project development, with an additional $25 million earmarked for completion and production.
InvestingPro Insights
In light of the recent controversies surrounding American Resources Corporation (NASDAQ:AREC), investors may benefit from a closer look at some key financial metrics and insights from InvestingPro. Despite the company's efforts to counteract the spread of misleading information, AREC's financial health and market performance have been areas of concern, according to InvestingPro data and analysis.
InvestingPro Tips highlight that American Resources operates with a significant debt burden and may have trouble making interest payments on its debt. This is particularly relevant as the company emphasizes its focus on growth through non-dilutive capital. Additionally, the stock's recent performance has been troubling, with an InvestingPro Tip indicating that the stock has taken a significant hit over the last week, which aligns with the volatility mentioned in the company's statement.
From a data standpoint, AREC's market capitalization stands at a modest $58.59 million, reflecting the size of the company in the broader market. The P/E Ratio (Adjusted) for the last twelve months as of Q1 2024 is -2.58, suggesting that the company is not profitable during this period. Moreover, the Revenue Growth for the same timeframe shows a sharp decline of -79.7%, underlining the challenges AREC faces in generating sales.
For investors looking to delve deeper into the financials and future prospects of American Resources, there are additional InvestingPro Tips available. These tips provide insights into aspects such as the company's cash burn rate, gross profit margins, and valuation implications for its free cash flow yield. There are 17 additional tips listed on InvestingPro, which can be accessed to gain a more comprehensive understanding of AREC's financial position and stock performance.
To explore these insights further, interested investors can take advantage of a special offer on a yearly or biyearly Pro and Pro+ subscription with the coupon code PRONEWS24, which grants an additional 10% off.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.