Posted at 4:43 p.m. EDT on Thursday, Oct. 1, 2015
You bought Concho (CXO) on the last underwriting, the one at $108 back in February. You caught a moonshot to $128 as oil had that amazing fake-out move to the low $60s from the low $40s. It was an amazing deal and people felt great about it ... until oil collapsed back to $3 below where it was when that secondary was priced.
But hope springs eternal in the oil patch, and today's $92-a-share offering of 7.7 million shares was another winner, with the stock finishing up six.
Funny, oil's $3 lower than it was in February, and Concho, which is one of the best of the Permian plays, had to sell oil $16 lower than last time.
I think this says a lot about where the oil stocks are in this country.
First, Concho's a great company with a better balance sheet than most of the independents. It's been one of those companies that's been able to throttle back costs and still expand production growth. In other words, it is one of those scrappy companies that can muddle through.
It didn't need to do this offering.
Unless, perhaps, it wanted a war chest to be ready to drill for the oil of other companies that can't get credit.