Why This Small-Cap Energy Stock Plunged 78% in the First Half of 2025

Key Points

• New Fortress Energy could have made it big in the high-potential LNG space.

• The company, however, is taking a hit from all sides and struggling to survive.

• 10 stocks we like better than New Fortress Energy ›

When a stock gets all but wiped out in six months, you're left wondering whether it's an overreaction or a falling knife. Investors in New Fortress Energy (NASDAQ: NFE) have been an unfortunate lot, with the stock tanking 78% in just the first six months of 2025, according to data provided by S&P Global Market Intelligence.

New Fortress Energy is an energy infrastructure company specializing in liquified natural gas (LNG). The U.S. is already the largest export of LNG and is expected to grow its share. Shell, meanwhile, projects global demand for LNG to surge by nearly 60% by 2040.

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New Fortress Energy could have been a major beneficiary of the LNG boom. So what went so drastically wrong with the company that's now reduced to a small-cap stock? Could it become one of the biggest turnaround stories ever?

Image source: Getty Images.

Troubles and more troubles

Trouble started brewing for New Fortress Energy as its debt piled up. The company delayed its dividend payment in September last year. Then in November, it issued a going concern warning, stating that it didn't have enough cash to repay debt maturing in 2025, and management had "substantial doubt" about the company's "ability to continue as a going concern."

As expected, New Fortress Energy has since diverted all its attention to raising funds through the sale of shares or fresh debt, none of which has sat well with investors. In March, New Fortress Energy announced a distress sale of its Jamaican business for $1 billion in a move that shocked investors, and the stock plunged.

And in between, New Fortress Energy delayed key LNG projects that added to its costs and hit profitability. In the first quarter, the energy company reported a 31% year-over-year drop in its revenue and a net loss of $0.73 per share, missing analysts' estimates by a huge margin.

Is it time to buy New Fortress Energy stock?

New Fortress Energy's troubles are far from over yet. The company delayed the regulatory 10-Q filing for its last quarter, attracting a delisting warning notice from the Nasdaq stock exchange. And when it did submit the SEC filing on June 30, management sounded the going concern warning bell yet again, further stating that New Fortress Energy's "current liquidity and forecasted cash flows from operations are not probable to be sufficient to support, in full, obligations as they become due."

There's also a fresh challenge facing New Fortress Energy. Just days ago, Puerto Rico's finance regulator rejected a proposed $20 billion, 15-year LNG supply contract between two New Fortress Energy subsidiaries, citing inconsistencies in the contract and fears of a near-monopoly, among other things. The feud between New Fortress Energy and the Puerto Rican government has escalated further, with the energy company withholding an LNG shipment over payment dues.

Given New Fortress Energy's dire situation, you probably won't want to try to catch a falling knife.

Should you invest $1,000 in New Fortress Energy right now?

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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.