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 Walter Energy (NASDAQOTH:WLTGQ) dropped 17% today after canceling a loan refinancing.
So what: Forbes is reporting that Walter pulled $1.55 billion in loan refinancing due to market conditions. Volatility and a slight rise in interest rates recently has made it less attractive for companies to issue new debt, and Walter may have been unhappy with the terms investors were demanding.
Now what: The metallurgical coal market is leaving producers burning cash at a rapid rate, and the industry will be forced to cut supply further. That leaves companies like Walter in a poor position, and now creditors may be losing confidence in the company, as well. I don't think this is a discount to buy on, and would be wary of stocks across the coal industry.
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Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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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