Why PDC Energy Stock Plunged as Much as 16% in Early Trading Today

Shares of oil and natural gas driller PDC Energy (NASDAQ: PDCE) fell as much as 16% in the first 90 minutes of trading on Sept. 10. So far in 2020 the company's stock price has been cut roughly in half. The big issue is clearly the COVID-19 related demand disruption that has left energy markets moribund for months. Today's drop, however, was related to something very specific.

The news that spooked investors today is that PDC Energy announced plans to issue an additional $150 million worth of debt. The proceeds of the sale, which will carry an interest rate of 5.75%, will be used to pay down a revolving credit facility. In other words, the exploration and production company is looking to turn temporary debt into permanent debt. Investors were not pleased with that development.   

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Source Fool.com