Clean Energy (CLNE)

[Jack_Bolander]

MIAMI-DADE IS A LOSE / LOSE FOR CLNE.

It looks as if CLNE, has lost M-D to Trillium, but may have wangled a last minute reprieve…. It doesn’t matter, because Miami-Dade is a lose / lose deal.

First, CLNE could outright lose the M-D contract to Trillium creating (reinforcing ?) the stigma that this is a loser company. Losses in other bids along with M-D will leave the impression that CLNE is too expensive, or worse, irrelevant, hurting new, potential business going forward.

If CLNE wins, I suspect M-D will be a LOSS LEADER, so as to avoid the negative LOSER implications I have already mentioned.

Although the dollars associated with an M-D win look big, this contract is for a number of years, so the annual numbers are not as impressive. And if you are losing money on this deal over a number of years, those losses mount up, making overall profitability for CLNE more difficult to achieve.