Why Cheniere Energy Shares Popped


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Cheniere Energy (NYS: LNG) rose 11% today on anticipation about regulators' decision about its export facility.

So what: Bloomberg is reporting that regulators could decide as early as next week if Cheniere can go ahead with its $10 billion liquefied natural gas export facility. They are meeting April 19 to discuss the project, and investors should know soon whether the project is moving forward.

Now what: The opportunity to export in the LNG market is enormous because demand overseas is growing. Cheniere could have a near monopoly on domestic exports if approved, but there are still challenges if the project moves forward. The company would need to finance the deal, and it would be years until any real revenue started flowing in. Those are two risk factors that will keep me from buying today, but speculators are jumping on board despite the risks.

Interested in more info on Cheniere Energy? Add it to your watchlist byclicking here.

At the time thisarticle was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.