This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Five Dumbest Things on Wall Street This Week: Dec. 7

2. McMoRan's Monkey Business

Just when its high-profile Davy Jones well was turning into the second coming of Al Capone's vault -- loads of hype, lots of drilling, lack of treasure -- McMoRan Exploration (MMR) hit a gusher Wednesday when Freeport-McMoRan Copper & Gold (FCX) purchased the company for $14.75 per share, or $2.1 billion.

Don't ask JPMorgan (JPM) energy analyst Joseph Allman about the company's jackpot, though. He has zero to say on the matter. Literally.

Check this out: In the week prior to Freeport's purchase, shares of McMoRan had lost more than a third of their value, sinking below $8 a share, after the New Orleans-based E&P player revealed that it repeatedly failed in its efforts to test the Davy Jones well in the Gulf of Mexico. On Monday, the beleaguered driller said in a press release it had "limited success" using a solvent to dissolve the barite which has been blocking the natural gas well for months. McMoRan added that it may inject more solvent using a propellant stimulant gun to unclog the perforations and would "provide updates as flow-testing operations progress."

In other words, after years of digging an ultra-deep well in super-shallow water, McMoRan had nothing to show for its efforts and nothing left to tell the press.

Things got so bad, in fact, that some analysts, like JPMorgan's Joseph Allman, began questioning whether the wildcatter had sufficient cash to survive the Davy Jones debacle.

"We estimate that the company needs to raise over $500 MM in 1Q13, based on NYMEX futures prices. The combination of valuation, operational uncertainty and apparent financial tightness causes us to maintain our 'underweight' rating," Allman wrote on Monday after the latest bad news came out. Allman added that his price target for the stock was $0 per share.

Oh, brother Allman! Only two days before the company gets bought out for billions, you told your clients that McMoRan was worth zilch. Talk about bad timing!

So what do you have to say for yourself now?

"Due to JPMorgan's involvement in the transaction announced on Dec. 5, 2012, we are suspending our rating and price target for McMoRan Exploration Co. Our prior rating and price target should no longer be relied upon."

How convenient! He buried (metaphorically and financially) investors in Davy Jones' locker and then completely vanished from the scene.

Alas, if only Geraldo Rivera tried the same disappearing trick after his televised Capone vault humiliation, we can only imagine how wonderful the world would look today!
4 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
MMR $0.00 0.00%
DRI $62.49 -0.76%
P $9.67 3.53%
SODA $14.88 1.02%
ZNGA $2.55 0.00%


Chart of I:DJI
DOW 17,740.63 +79.92 0.45%
S&P 500 2,057.14 +6.51 0.32%
NASDAQ 4,736.1550 +19.0610 0.40%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs