Wall Street Hates Transocean Right Now; Should Investors be Worried?

Whenever short-sellers start piling onto a company, it's worth looking at why that is happening. So when offshore driller Transocean's (NYSE: RIG  ) short position increased to nearly 15% of its market cap, it is time that investors start asking questions. Could it be that short-sellers are just looking to make a quick buck on today's weak rig market? Are there some structural issues at Transocean that could lead to further problems? Or are main competitor Seadrill (NYSE: SDRL  ) and upstarts Ocean Rig UDW (NASDAQ: ORIG  ) and Vantage Drilling (NYSEMKT: VTG  ) taking market share from the formerly dominant player in the space?

Find out the answers to these questions, as well as whether you should follow Wall Street into the short position at Transocean, by tuning into the video below.

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  • Report this Comment On June 06, 2014, at 8:36 AM, MightyMinnow wrote:

    Is there any M&A incentives/rumors? When was the last big drillers merger? One reason RIG is so cheap is that the competition is even cheaper.

  • Report this Comment On June 06, 2014, at 11:17 AM, spokanimal wrote:

    When you say that Transocean is getting worse by the day, it's important to note that in the past, they owned a fleet of old jackups that they sold last year, or that the 8, older semi's that they're spinning off in the North Sea are pretty much the oldest rigs in their fleet.

    Meanwhile, they have almost a dozen new rigs under construction, and are amidst an aggressive cost-cutting program and administrative reorganization.

    Except for the market having weakened from last year's cyclical high point, it's fair to say that things were getting worse for Transocean, day by day...

    ... LAST year, not THIS year.

    Also, you need to talk to the gal behind the camera who's flipping those talking points at you. You were speaking rather haltingly as you were reading them.

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