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Platinum Energy Solutions IPO Will Offer Chance to Invest in Fracking


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Platinum Energy Solutions IPO Is In Hot Fracking Sector

Platinum Energy Solutions IPOPlatinum Energy Solutions Inc. has chosen the symbol “FRAC” for the Platinum Energy Solutions IPOto emphasize that their company is a natural gas and oil hydraulic fracturing (a.k.a. fracking) stock investment.  The Platinum Energy Solutions IPO will offer stock market investors an opportunity to invest in an oilfield services company that is highly involved with and specializes in the fast growing hydraulic fracturing method of natural gas and oil extraction.

Investors Will Have To Wait For The Platinum Energy Solutions IPO

When the Platinum Energy Solutions IPO will occur is not certain.  The company was hoping to do the Platinum Energy Solutions IPO in February 2012, but unfavorable market conditions in the natural gas sector due to extremely depressed natural gas prices have forced the Platinum Energy Solutions to delay the Platinum Energy Solutions IPO until further notice.

Platinum Energy Solutions was planning to sell 14 million shares for up to $11 each during the Platinum Energy Solutions IPO, which would have raised up to $154 million and given Platinum Energy Solutions a valuation approximately 2.5 times the company’s annualized fourth quarter sales.  The company decided to delay the Platinum Energy Solutions IPO because it was felt that the company’s valuation at the desired price per share was out of line with other oilfield services companies, which sell for just over 1 times annualized fourth sales.

Platinum Energy Solutions wants to complete the Platinum Energy Solutions IPO to pay down debt, redeem approximately $20 million of preferred shares, and raise funds necessary to compete with larger more established rivals in the fracking business.

While depressed natural gas prices have delayed the Platinum Energy Solutions IPO, the lead underwriters for the Platinum Energy Solutions IPO, Morgan Stanley and J.P. Morgan, will assess market conditions for the company to determine the best time to go forward with the Platinum Energy Solutions IPO.  If natural gas prices recover, the Platinum Energy Solutions IPO will become more likely, as market demand for fracking services and stocks will increase.

Analysts have raised concerns about the Platinum Energy Solutions IPO and Platinum Energy Solutions’ business model since the company has only two major customers that account for most of their revenues and the company has long term financing needs for fracking machinery and equipment, but can currently only secure short term contracts from its customers.

Whether the Platinum Energy Solutions IPO happens and whether Platinum Energy Solutions prospers will be closely tied to natural gas prices in future years and the subsequent demand for fracking services provided by oilfield services companies. 

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