LyondellBasell Industries Shares Jumped: What You Need to Know
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of LyondellBasell Industries (NYS: LYB) jumped 11% after the company announced a debt buyback.
So what: The company announced today that it was beginning a tender offer to buy back up to $1.47 billion of 8% senior secured notes and up to $1.32 billion in 11% senior notes. The company has $4.69 billion in cash and is also planning on paying a special dividend of $2.6 billion.
Now what: Management is obviously putting its cash to use, but this doesn't leave a lot of cushion for a rainy day. Investors are seeing this as a big bullish bet on the company's future as the chemicals industry recovers from a downtrend. I'm not a buyer today, but if shares dip in coming weeks it may be a nice time to start picking some up.
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At the time this article was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.