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 oil and gas explorer Hyperdynamics (AMEX: HDY) sank as much as 20% in early Tuesday trading on extraordinarily high volume.
So what: At the time of publication, nearly 5 million Hyperdynamics shares had already changed hands, versus the three-month average volume of about 1.5 million shares. I couldn't pinpoint any company-specific news driving today's heavy sell-off, but when you couple the stock's beta of 2.7 with the risks recently outlined by my fellow Fool Toby Shute, sharp one-day drops shouldn't come as a surprise.
Now what: Hyperdynamics remains just too speculative for most portfolios. Even with today's double-digit plunge, the shares are up more than an astonishing 500% over the past six months and, according to Toby's valuation work, are being valued at about $4 per risked barrel. While Hyperdynamics's prospects in offshore Guinea are certainly attractive, I'd wait until Mr. Market is a lot less optimistic about them before jumping in.
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