Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



A Change for Delta Petroleum

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Troubled oil company Delta Petroleum (Nasdaq: DPTR  ) is now walking the proverbial tightrope after it recently began trading on Nasdaq’s Capital Market rather than the exchange’s Global Market. The company’s recent relisting at the hands of Nasdaq means that shareholders in Delta may be witnessing just the first of several punitive actions against the company. Like its name, Delta is at a clear crossroads.

In English, please
Nasdaq’s relisting means that the company’s outstanding shares have been transferred from the big swimming pool with the slides and diving boards down to the baby pool, where swimmers need to have water-wings and their mother’s undivided attention in order to dip their toes in. This is a bad thing. 

As of Feb. 1, the company received an additional 180 days from Nasdaq to regain compliance in order to requalify for play in the deep end. In the short term, this is a good thing of course. But, ultimately, one can’t argue this is anything other than yet another major set-back for the company.

Those are the rules
According to Nasdaq listing rules, the minimum price of a company’s common stock cannot be less than $1.00 per share for 30 consecutive business days. Delta’s shares are currently trading at $0.74. Of course, it wouldn’t take much for a volatile company like this one to muster a rally (especially considering the extremely volatile nature of energy prices), but for the time being, the company will have to operate per normal under the looming threat of a complete de-listing. This is something that should concern investors.

Delta’s underperformance is certainly not a recent phenomenon, either. Share prices have steadily declined from $4.67 in February 2009 to its current status well below a dollar.

A last-ditch effort
Delta had hoped to catalyze a turnaround after selling some of its working assets and being aided by a simultaneous increase in gas prices, but bad days didn’t end there. Hitting dry wells and surviving on cash tapped through the equity markets is no way to run an oil company. No doubt, they have put in a lot of effort to delve into unproven areas, but that strategy clearly continues to backfire. Without a proper asset base from which they can generate revenue, it wouldn’t make sense to keep digging with investors’ hard-earned money.

Of course, Delta had its days under the sun, and it would be nice to see a turnaround. There have been other reasonably similar success stories like Talisman Energy (NYSE: TLM  ) , but it would be wise to take a closer look at the underlying business fundamentals of companies like Delta that are riding on such a volatile lifeline. Leaving everything to fate sounds pretty un-Foolish, especially in this sink-or-swim sector.

Isac Simon doesn’t own shares of any of the companies mentioned in the article. 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.

Read/Post Comments (0) | Recommend This Article (24)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1440024, ~/Articles/ArticleHandler.aspx, 10/23/2016 10:23:41 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
DPTR.DL $0.00 Down +0.00 +0.00%
Delta Petroleum Co… CAPS Rating: **
TLM.DL $0.00 Down +0.00 +0.00%
Talisman Energy CAPS Rating: **