Why Harvest Natural's Shares Crashed Today
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 Harvest Natural Resources fell 40% today after the sale of a major asset fell through.
So what: A $725 million sale of Harvest's stake in Venezuelan energy interests to Indonesian government owned PT Pertamina collapsed. The government of Indonesia rejected the transaction after it looked as if Venezuela had opened the door to closing the deal just last week.
Now what: Harvest had expected about $525 million in proceeds from the deal, and with a market cap of less than half that amount, this is clearly terrible news. The company is now back to square one, trying to figure out what to do with this asset it can't develop itself. Keep an eye on management's moves going forward. The company clearly has a good asset but not a lot of ways to exploit it right now.
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The article Why Harvest Natural's Shares Crashed Today originally appeared on Fool.com.Fool contributor Travis Hoium has no position in any stocks mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw. The Motley Fool owns shares of Harvest Natural Resources. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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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