Shares of oilfield services firm Weatherford International Plc (NYSE: WFT) on Nov. 13 slipped below $1 apiece, to a 29-year low, the latest sign that investors are losing confidence in its turnaround plan.
The stock, which peaked at almost $50 in 2008, has fallen sharply since oil prices crashed in late 2014, leading to a string of losses at Weatherford since the third quarter that year. The company has $7.6 billion in long-term debt.
Pressures on its share price intensified in the past two weeks after the Houston-based company missed its free cash flow targets in the latest quarter, and said it would no longer disclose deadlines for achieving asset sales, a signal to investors that it was having trouble finding buyers.
The shares fell 5% to close at 97 cents on Nov. 13.
Analysts said the decline would not result in a breach of debt covenants, but a stock that closes below $1 for 30 consecutive days can trigger a Nasdaq deficiency notice, potentially leading to delisting.
Weatherford did not immediately respond to a request for comment.
Weatherford has pinned hopes for a turnaround on newly appointed CEO Mark McCollum, who has pushed to restructure operations, sell businesses and cut costs.
"Fixing WFT's (Weatherford's) lack of free cash flow generation over the past decade is ultimately the measuring stick by which investors will judge him. So far, the numbers aren't in his favor," analysts from Barclays wrote in a note last month.
The company was $488 million cash flow negative year-to-date at the end of September, and will likely not meet its plan to break even on cash flow for the full year, Barclays analysts said.
U.S. oil producers recently have slowed spending on new wells in the face of surging crude output and transportation bottlenecks.
"Markets aren't helping them a whole lot," said Sajjad Alam, a senior analyst at debt-rating firm Moody's Investors Service. "The more the share price drops the harder it becomes for investors to stay in."
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