Why Shares in Core Labs Fell Today
Shares in reservoir services company Core Laboratories (NYSE: CLB) fell by more than 4% this afternoon. The move comes down to a couple of factors. First, the price of oil continued its slide. It's now hovering around $107 a barrel, having been above $122 a month ago.
While it's important not to get too caught up in short-term movements in energy prices, the intensity of the move highlights that some speculative money had undoubtedly gone into energy commodities and that so-called "fast money" can quickly come out.
Second, investors are nervous that the recent hike in interest rates (Federal Reserve and market rates) will choke off economic growth and lead to lower demand for oil. Third, the concerns are exacerbated with a stock like Core Laboratories because, as my fellow fool.com contributor Eric Volkman writes, Core Labs recently announced a program to sell the company's $60 million worth of equity. It dilutes existing shareholders' claims on the company's earnings and cash flow.
Source Fool.com
