Why Forest Oil's Shares Popped
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 Forest Oil (NYS: FST) jumped 10% today after announcing the CEO would step down.
So what: Chief executive H. Craig Clark will step down immediately and be replaced by board member Patrick McDonald. The company's stock is down more than 50% since January and hit a new 52-week low today. It was time for change at the top.
Now what: McDonald said he would focus the company on the liquid rich Eagle Ford shale play in Texas and focus on selling assets. Forest Oil has racked up $1.8 billion in debt and is planning to sell assets to pay off some of that debt and raise cash. I don't think this makes Forest Oil a buy yet, but if operations improve and assets can be sold for a reasonable value, then the stock could rebound in the future.
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The article Why Forest Oil's Shares Popped originally appeared on Fool.com.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.
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