With a share dividend set to be distributed soon, Imperial Petroleum Inc. (NASDAQ: IMPP) could witness renewed momentum and soar as the company intends to distribute the share dividend of its spin-off on June 21. Considering the bullish momentum IMPP stock has been witnessing since repaying its $96 million debt to Alpha Bank, the stock could continue soaring ahead of the distribution date on the 21st as many investors are looking to secure the share dividend. For this reason, IMPP stock is one to watch closely ahead of its upcoming catalyst.
IMPP Stock News
Oil and gas aren’t going anywhere anytime soon. According to the Energy Information Administration (EIA), the US is expected to increase oil and gas production through 2050, and given the Russian oil embargo, this rings especially true.
In 2019, the US imported a total of 61.75 million barrels from Russia – a new high at the time. Since the embargo took place in 2022, it’s safe to assume the sanctions on Russian oil have left a void the oil logistics market is trying to fill.
As an oil and gas transporter, IMPP has benefited from these disruptions. Recently IMPP purchased two handysize dry bulk carriers from Japan, and the vessels were delivered at the end of March, increasing the fleet’s capacity by 71,000 deadweight tons (dwt). IMPP has increased its fleet from 4 in December 2021 to 12 in February 2023. Its fleet can now transport 808,000 dwt of oil at a time. This drastic increase in vessel quantity is indicative of the market’s growing demand for oil tankers, which is promising for IMPP.
IMPP is well-positioned to take advantage of the growth in the oil and gas logistics market, which is forecast to increase by 5.3% by 2027. North America alone accounts for 37% of this growth. Thanks to hydraulic fracturing and other technological developments, the United States is able to mine more gas and oil, translating to higher demand for oil and gas logistics. IMPP will have more opportunities to generate revenue from its fleet as the market grows.
Debt Free
Due to IMPP’s initiative and the market’s growing demand, IMPP was able to pay off the last of its $69 million debt to Alpha Bank earlier than expected, making it debt free. The company was able to pay off these debts by mortgaging two of its containers – Clean Nirvana and Clean Justice. The early repayment of this debt is estimated to have saved IMPP $5 million per annum in finance costs and $10.3 million per annum in principal loan repayment.
Reverse Split
On April 28th, IMPP conducted a 1-15 reverse split to stay in accordance with the NASDAQ’s listing requirements. Following the reverse split, IMPP stock climbed 8% and fell 8% before riding the 21 MA support. The stock then fell to a low but started to run after the Q1 results were released.
An Undervalued Play?
IMPP has approximately $69 million in cash, significantly larger than its 39.02 million market cap. This indicates that the stock is extremely undervalued. That being said, given IMPP’s expanding fleet, and the repayment of its $69 million debt, things are looking up for IMPP. It is highly probable that IMPP will generate more revenue in this upcoming quarter as a result of its efforts. If that occurs, the earnings report may act as a positive catalyst for the stock moving forward.
*Updated June 14th, 2023
Incoming Dividends
IMPP might be poised for a major run this week due to the anticipated distribution of its subsidiary’s – C3is Inc – shares where IMPP shareholders will receive 1 share of C3is for each 8 shares of IMPP they own. This move is likely to encourage shareholders to hold onto their shares since its date of delivery is set to be around June 21. In this way, investors may be discouraged to sell their shares since the share dividend could be on the line. At the same time, the share dividend provides IMPP with positive publicity which is already considered to be undervalued by many investors due to its cash balance that dwarfs its market cap. Based on this, IMPP stock could witness a strong run ahead of the share dividend distribution.
IMPP Stock Financials
During the first quarter of 2023, IMPP experienced an explosive revenue increase. It made $65.4 million in revenues, a 1,182% increase in revenue from Q1 2022. Income increased as a result as well. Its Q1 2023 income is $35 million, a 17,750% increase in revenue from Q1 2022. This progress is a direct result of increased fleet operational utilization, which increased to 84% due to the fact that IMPP no longer has any mortgaged ships. Its debts are paid and set to sail beyond the horizon.
Media Sentiment
@ACInvestorBlog believes a buyback might happen upon the spin-off of C3is.
@777Echo777 is extremely bullish on IMPP’s potential as it could be extremely undervalued at current levels.
Technical Analysis
IMPP stock is in a bullish trend with the stock trading in an upward channel. Looking at the indicators, the stock is above the 200, 50, and 21 MAs. Meanwhile, the RSI is neutral at 60 and the MACD recently turned bearish.
As for the fundamentals, IMPP recently announced the distribution date of its spin-off share dividend which is why traders are likely to hold onto their shares until the date of distribution which is expected to be made around June 21. Given the bullish sentiment surrounding IMPP stock at the moment, the stock could further climb ahead of the distribution date.
IMPP Stock Forecast
As things stand, IMPP seems likely to continue its run due to the publicity it is garnering from its spinoff dividend. With the distribution date set for June 21, shareholders may be encouraged to hold onto their shares to receive C3is’ share dividend. Given that many investors are confident IMPP stock is extremely undervalued at current levels, the stock could soar soon as we approach the distribution date of C3is’ dividend.
If you have questions about IMPP stock and where it could be heading next feel free to reach out to us in our free alerts room!
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