Why Transocean Stock Rallied as Much as 13% Today
Shares of energy services company Transocean (NYSE: RIG) rose a dramatic 13.8% in early trading on Tuesday. That gain didn't hold up well, however. As of 12:03 p.m. EST, the stock was only up by 3.5%.
The backstory here is pretty complicated. The situation playing out on Tuesday actually started in August, when Transocean announced plans to do a debt exchange. The goal was to help solidify the company's finances during a time of material upheaval in the energy industry. To simplify the complex industry dynamics, the economic shutdowns and stay-at-home orders implemented to slow the spread of the coronavirus pushed the energy market into a severe supply/demand imbalance that resulted in depressed energy prices. That, in turn, led exploration and production companies to pull back hard on their spending, which sapped demand for the offerings of energy services companies like Transocean.
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Source Fool.com
