The ClearSign Technologies (NASDAQ:CLIR) Share Price Is Down 84% So Some Shareholders Are Rather Upset
Over the last month the ClearSign Technologies Corporation (NASDAQ:CLIR) has been much stronger than before, rebounding by 79%. But will that repair the damage for the weary investors who have owned this stock as it declined over half a decade? Probably not. In fact, the share price has tumbled down a mountain to land 84% lower after that period. It's true that the recent bounce could signal the company is turning over a new leaf, but we are not so sure. The important question is if the business itself justifies a higher share price in the long term.
We really feel for shareholders in this scenario. It's a good reminder of the importance of diversification, and it's worth keeping in mind there's more to life than money, anyway.
See our latest analysis for ClearSign Technologies
ClearSign Technologies hasn't yet reported any revenue, so it's as much a business idea as an actual business. You have to wonder why venture capitalists aren't funding it. So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. It seems likely some shareholders believe that ClearSign Technologies will significantly advance the business plan before too long.
Companies that lack both meaningful revenue and profits are usually considered high risk. There is almost always a chance they will need to raise more capital, and their progress - and share price - will dictate how dilutive that is to current holders. While some such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt. Some ClearSign Technologies investors have already had a taste of the bitterness stocks like this can leave in the mouth.
When it reported in December 2019 ClearSign Technologies had minimal cash in excess of all liabilities consider its expenditure: just US$6.8m to be specific. So if it hasn't remedied the situation already, it will almost certainly have to raise more capital soon. With that in mind, you can understand why the share price dropped 31% per year, over 5 years. You can click on the image below to see (in greater detail) how ClearSign Technologies's cash levels have changed over time.
Of course, the truth is that it is hard to value companies without much revenue or profit. What if insiders are ditching the stock hand over fist? I would feel more nervous about the company if that were so. You can click here to see if there are insiders selling.
A Different Perspective
It's nice to see that ClearSign Technologies shareholders have received a total shareholder return of 0.5% over the last year. That certainly beats the loss of about 31% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that ClearSign Technologies is showing 6 warning signs in our investment analysis , and 2 of those make us uncomfortable...
ClearSign Technologies is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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