Top Short Play: Energy Stock Plummets
Daily Stock Market Summary
Markets came out of the gate today up modestly, and have been slowly losing momentum as the day wears on. It’s not a sharp recovery from steep losses during yesterday’s treading. Volatility continues to be the rule: just when the market seemed to gain confidence after February’s big correction, momentum started slipping again.
Energy shares are supporting the market today, inching upward as producers ratchet back from a global supply glut. Tech shares, meanwhile, are struggling to rebound from yesterday’s hammering. The market is trading on relatively muted volume today as investors await word from the US Federal Reserve tomorrow. Interest rates continue to fluctuate, with the bond market providing no definitive indicators for the direction of the economy.
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Willbros Group is a specialty contractor focused on providing infrastructure for the energy sector. Based in Houston, they’ve been struggling with major losses on lump sum contracts in recent months.
They hit the markets with multiple negative news events this morning. First, they announced operating losses around $90 million on revenues around $850 million.
Second, they confirmed that are exploring “strategic alternatives,” including the selloff of all assets, as a solution to their current financial situation. They already sold off a major pipeline operations business unit in January, retaining only the workforce needed to complete current contracts. Their current cash/credit situation suggests an operational liquidity crunch in the coming year. They are discussing potential sales with various organizations.
Investors have been selling the stock rapidly since we issued our news alert this morning. It sits down over 70% at the time of this writing, leading to nice profits for News Quantified users how added the stock to their basket of shorts.