Cloud Peak Energy, the third largest coal producer in the U.S., is expected to go public this week.
Reuters reports: “analysts cautioned that demand for the offering could be tepid. The IPO is priced at a premium compared with competitors.”
Formed in 1993, Cloud Peak Energy operates three coal mines located in Montana and Wyoming. Cloud Peak coal is sold primarily to utilities and accounts for 6% of the electricity generated in the US.
Cloud Peak is subsidiary of Rio Tinto, which produces about 100 million tons of coal annually and controls 1 billion tons in proved and probable reserves. Cloud Peak is set to start trading this week under the ticker symbol “CLD.”
Madd Money‘s Jim Cramer said, “Cloud Peak Energy could quickly become the premium coal company in this country.”
November 18th, 2009 at 12:27 am
With coal stockpiles at already sizable levels outside coal fired power plants, unless we have a particularly cold winter and industrial demand picks up in the country which would necessitate greater electrical output, the hat has to tip more toward producers of coal which is used for steel production. All things being equal, Cloud Peak may not be anything special at this time. Once the buying frenzy is through on the first day, we will see if Jim Cramer has been inhaling too much coal dust.