Flotek Stock Soars on Florida Chemical Sale

FTK stock has been trending lower since April

Jan 11, 2019 at 9:44 AM
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Houston-based chemical company Flotek Industries Inc (NYSE:FTK) said it is selling its consumer and industrial chemistry technologies business, Florida Chemical Company, to Archer Daniels Midland (ADM) for $175 million -- more than double the company's market cap of 80.42 million at last night's close. As such, FTK shares have more than doubled out of the gate, last seen up 100.7% at $2.83, near the top of the Big Board.

Longer term, FTK was trading near $6 around this time last year, before a late-April bear gap in reaction to dismal guidance put the stock on a steady path lower. Since its April 20 close at $6.61, Flotek has shed 57%, and hit an eight-year low of $0.95 on Dec. 24.

Short sellers have been in the driver's seat during this downtrend. The 7.7 million FTK shares currently controlled by these bearish bettors represents 14.4% of the stock's available float, or 8.9 times the average daily pace of trading.

Elsewhere, the two analysts in coverage are split, with one maintaining a "buy" rating, and the other one a "hold." Meanwhile, the average 12-month price target of $3 is a slim 6% premium to FTK stock's current price.

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