Tellurian (TELL 7.71%) stock is making big gains in Thursday's trading. The liquified natural gas specialist's share price was up 7.4% as of 12:15 p.m. ET, according to data from S&P Global Market Intelligence.
Tellurian submitted a filing to the Securities and Exchange Commission (SEC) today stating that it will be issuing stock to an institutional shareholder in exchange for debt held through bonds being relinquished. The move should improve the energy company's financial flexibility, and the market appears broadly bullish on the development.
In addition to the stock issue and bond extinguishment, a separate filing submitted to the SEC yesterday showed that another institutional investor had increased its position in Tellurian.
Tellurian is getting some institutional help
Tellurian will provide 47.9 million shares of stock to High Trail Capital, an investment management firm. In exchange, $37.9 million out of a $250 million bond holding that is set to come due in 2025 will be extinguished.
News about the deal with High Trail follows a filing submitted to the SEC on Dec. 27 outlining new stock purchased by Chatterjee Fund Management. Per the filing, the firm has increased its ownership position in Tellurian to 7.3% -- up from its previous ownership position of 5.2%.
What comes next for Tellurian stock?
Between High Trail taking stock in exchange for extinguishing debt obligations and Chatterjee increasing its stock holdings in Tellurian, the liquid natural gas specialist appears to be getting some notable votes of confidence from institutional investors. The stock is still down roughly 39% year to date and 84% over the last five years, but it looks like some large stakeholders see the potential for a comeback.
Tellurian is facing bankruptcy risks. If the business can deliver some meaningful turnaround progress and show signs it's capable of avoiding bankruptcy, the company's share price could skyrocket. But it remains a very high-risk investment even on the heels of big valuation pullbacks.
