Tuesday, June 18, 2024


Dhaka Tribune

ESGL Hldgs (NASDAQ: ESGL) up 170% - but it’s a right dog so far all the same

The immediate performance looks very good - but is this a real turnaround or not? 

Update : 28 Nov 2023, 07:11 PM

ESGL Holdings (NASDAQ: ESGL) stock is up 170% over yesterday and today. The big question for us here is to wonder whether this is a real change in the underlying for ESGL stock or some flurry driven by a slight misreading of the news. We tend to think that it’s that second. Part of this is driven by how ESGL has been a right dog of a stock since its IPO - or more accurately, Spac merger and despac onto the market - back in August.

The business line: “ESGL Holdings Limited provides waste solutions. It regenerates industrial waste into circular products using technologies and renewable energy. The company was founded in 1999 and is based in Singapore.” Well, OK, just the sort of thing the new economy is going to desire more of. 

But the performance has been terrible:

ESGL Holdings stock price from Google Finance

That despac was only in August this year: “The combined company is named ESGL Holdings Limited (“ESGL” or the “Company”) and will be led by ESA’s existing management team. The combined company’s common stock and public warrants are expected to begin trading on August 4, 2023, on the Nasdaq under the ticker symbols “ESGL” and “ESGLW,” respectively.” A 93% loss since then, eh? 

The big jump is being driven by this: “On November 15, 2023, Environmental Solutions (Asia) Pte Ltd, a wholly owned subsidiary of ESGL, renewed its Used Catalyst Disposal Contract with SRC. Under the contract, ESGL will continue to provide used catalyst waste disposal services to SRC through December 31, 2025.”

We don’t see that as being transformative. This is business they were doing before the Spac, during the past few months as well. Now they’re going to do it off into the future as well. But business that was already extant during that 93% stock price fall isn’t transformative upwards of that same stock price. True, it says things aren’t getting worse. But it’s not exactly a new contract that is going to boost the company either. 

We think this is a speculative flurry based on a market misread of what this contract really is.   

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