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LNG share price surges 25% in 1 day despite announcing ASX delisting

The Liquified Natural Gas Ltd (ASX: LNG) share price surged 25.5% in yesterday’s trade after the company announced it would be leaving the S&P/ASX 200 (INDEXASX: XJO) index to list in the United States (US).

What did Liquified Natural Gas announce?

In an update to the market, the LNG Board of Directors announced its decision to re-domicile the company to the US, with LNG to proceed to list on the NASDAQ Stock Exchange following regulatory and judicial approvals, as well as an affirmative shareholder vote.

LNG’s management has confidence in the company’s ability to raise new capital to fund its business and marketing efforts and believe that the re-domiciling is in LNG’s best interest.

The timing of the proposed re-domicile transaction will depend upon the length of regulatory processes in both the US and Australia, and on the availability of court dates in Australia.

Managing Director and CEO Greg Vesey said the company anticipates that a re-domicile transaction could be completed in late 2019 or early 2020.

How did the LNG share price react?

Investors responded to the move positively, with LNG’s share price closing 25.5% higher yesterday at market close at $0.30 per share, which has since dipped slightly to $0.28 per share this morning. 

Even with yesterday’s share price bounce, the LNG share price is still down 42% for the year despite boasting a market cap of $166 million as at the time of writing.

Given the impending delisting, I can’t see much further share price growth for LNG investors, with the company citing its 100% operational involvement in the US as a key factor behind its NASDAQ listing.

What are some alternatives to LNG?

Within the Energy sector, I think there are a few good value stocks that could land in the buy zone post-reporting season in August.

The major players such as AGL Energy Limited (ASX: AGL) and Origin Energy Ltd (ASX: ORG) could thrive under the renewed Scott Morrison government, particularly with a more stable energy policy.

I also like the look of New Zealand-based renewables group Mercury NZ Ltd (ASX: MCY), which has been performing well so far this year and could continue to grow its operations in the second half of the year.

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Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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