TX Value Investor
Long/short equity, oil & gas

Nuverra Environmental: A Sinking Ship With Default Risk

This article will explain why investors in Nuverra Environmental Systems (NES) could lose 80+% of their investment over the next 12 months. The NES investor base is primarily retail investors, many of which blindly trusted Dick Heckmann and Jim Cramer, while 40mm shares (largely institutional investors) are short the stock. The key points:

  1. Rollup gone wrong: NES is a destroyer of capital and has yet to put up any decent results. The company has missed its guidance by 35+% in the last three years and yet to generate any positive operating profit.
  2. Misrepresenting itself: NES claims to be an environmental service company, when in fact it is just a simple oilfield service company (which trades at a meaningful
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