Orsted’s share price fell by more than 17% on August 25th, reaching the lowest levels in many years. Orsted shares were trading at DKK180, down over 86% compared to its previous high of DKK1,335; its market cap was DKK53 billion ($8.3 billion) or DKK180 billion.
Orsted shares have fallen in price
The Orsted share price is in a downward trend since the last few years, as the sentiment towards the wind industry has deteriorated. In 2022, the situation was made more complex by central banks raising interest rates in order to combat high inflation.
Orsted’s share price crashed after the U Department of the Bureau of Ocean Energy Management stopped the ongoing project via its subsidiary Revolution Wind.
It is an important development which began last year after the BOEM approved a loan to Joe Biden as part of his infrastructure package. The company has a power-purchase agreement for Rhode Island and Connecticut that lasts 20 years.
Orsted shares fall 27% after US wind project collapses. $9.4B rights offer announced
Trump’s administration has decided to stop the project due to his distaste for clean energy and because he was given millions in campaign donations from the fossil-fuel industry.
The company is likely to sue for a restart of the project, as it has about 80% completed, all foundations offshore installed, and 45 out 65 turbines are installed. According to the company:
Orsted will evaluate all possible options in order to quickly resolve this matter. It is also possible to engage with the relevant agencies in order to clarify or resolve any issues, as well as take legal action.
Orsted faces another significant challenge with the Resolution project. Orsted terminated its Ocean Wind 1 & 2 projects in New Jersey due to the high costs.
Orsted faces other urgent challenges
Orsted’s share price plummeted after it launched an $9.4 billion rights offering to finance its Sunrise project in the United States. The company did this after it failed to find a purchaser for the Sunrise project.
The company has just published encouraging financial figures. The company’s EBITDA increased by 10%, from DKK 15.5 billion to DKK 17.8 billion. Its revenues rose 11%. The net profit also increased to DKK 9,1 billion.
Orsted stock price analysis
Orsted share price chart | Source: TradingView
Orsted’s stock has experienced a steep decline in recent years. The stock price plunged down to DKK 176 – its lowest in many years. The stock fell below DKK 246 – its lowest point since 2023, and in January of this year. The chart was invalidated by moving below the DKK 246 level. This is its lowest point since 2023 and January this year.
The most probable scenario would be that the stock continues to remain under pressure. The stock will bounce back over the next few weeks, as the company deals with the Revolution Wind project halting either legally or through negotiation.
As new information becomes available, this post may change.
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