Weatherford International Plc (NYSE:WFT) recently called off its efforts to raise funds worth $1 billion after investors pulled down the stock. Whiting Petroleum took the decision in a hope that the Wall Street will drift away from the preference of energy finance and the oil prices will climb soon in the near future. The decision from the largest drilling contractor left a lot of investors running for their money. Whiting Petroleum Corp (NYSE:WLL) had kept itself on hold earlier, before deciding that it should actually raise bonds and cash selling.
In March 2015, Whiting had sold $1.05 billion new shares at a price of $30 per piece. And now, the price has fallen down to $18, which is a decrease of 40%.
Is Weatherford International affecting analysts and investors considerably?
The answer is yes. In the beginning of this week, the company had announced that it was planning to make a sale of convertible bonds as well as shares together. Thereafter, its shares fell about 17%, which compelled it to withdraw from its decision. The investors as well as analysts are not very happy about the decision though.
This is so because Weatherford International had, according to the investors, vouched to bring down the debt at careworn company, which is facing challenges at present due to accounting and acquisitions problems. An investment bank, Tudor, Pickering, Holt & Co., in the meanwhile said that Weatherford International was only sugarcoating the blow to the affected credibility of its management.
Meanwhile, Weatherford International Plc (NYSE:WFT) said that the interests of investors was on its mind at the #1 position, but they could not sell the securities for a rate which was much below the value created at the company.
As per the analysis of the Wall Street Journal, the energy producers in North America have made a sale of approximately $17 billion of the new stock in 2015. Many of the companies sold their stock in expectation of oil prices to rise. This however, has not happened yet and after a minor uptick of the prices, the rates have fallen below $50 per barrel.