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Energy company can recover recent stock losses with another strong revenue quarter.

Georesources (NASDAQ: GEOI, Stock Forum) investors found out just how bad it can be when a company says it will dilute everyone with a private placement. GEOI will sell 1.5 million unregistered shares at $22.50.

The sale of the shares was bad enough, but the fact that they went for a 20% discount to the market prices was awful. The stock fell 18% to $23.10, still not far below its 52-week high of $29.08.

GEOI has been in the spotlight recently. It set up a partnership with GE Energy Financial Services to put up nearly $100 million to buy and develop oil and gas in Oklahoma.

Wall Street may forgive the company the dilution fairly fast, if it posts another quarter like Q1.

For the period ending March 31, GEOI reported net income of $4.2 million compared to $790,000 in the same quarter a year ago. Total revenue increased to $23.9 million compared to $4.1 million

The shares in this operation are not likely to get hurt again unless oil prices drop like a rock.

ABOUT THE AUTHOR
From the news desk of 24/7 Wall St.

This report was prepared by 24/7 Wall St., LLC exclusively for Stockhouse. 

 
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