• Hedgeye Investing Summit: A Special HedgeyeTV Webcast Event

    The sharpest minds in investing discuss the most important market and economic developments and their investing implications. Join Hedgeye CEO Keith McCullough and our special guests live from October 14-16.

Takeaway: Please note we are removing TUSK (short) from Investing Ideas today.

Below is a note from our Energy team on why we are removing Mammoth Energy (TUSK) from the short side of Investing Ideas today:

TUSK announced a new $900MM contract with PREPA. For the short to work, we need to see governmental inquiry turn into governmental action; the likelihood of action appears slight given the circumstances that preempted the latest contract extension.

TUSK announced today (5/29/18) that it had officially signed a 1-year $900MM contract with PREPA that would cover additional restoration work on the island of Puerto Rico. The new contract is incremental to the existing $945MM contract Mammoth last amended with PREPA on 2/28/18. Based on the language of the press release, it doesn’t appear that Mammoth’s subsidiary, Cobra Energy, was forced to lower rates in order to secure the selection by PREPA through a formal bidding process. We should get additional clarity on the contract terms once the contract is filed with the SEC.