Here's some "news" (about a week old) about our JV big brother...but not what anybody wants to hear...I really hope it's wrong (having said that there are similar articles freely available on Google News for Halcon Resources)...
Let's hope that our JV big brother is not in some kind of trouble itself....
No, I am not a fortune teller. I am not psychic either. The writing was on the wall. Several factors have been blowing some big headwinds for Halcon Resources (HK), but the bulls have been turning a blind eye on these headwinds for months. This is not surprising. But stocks are not women, and I never fall in love with a stock. Other bulls have noted at the comments section of my articles that Halcon is a "forget about it" kind of stock, and since they have enough confidence in management, they do not watch it day-to-day.
In fact, Halcon's case reminds me of ATP Oil & Gas, Delta Petroleum, and GMX Resources to name a few. The market had also turned a blind eye for months on these three energy companies, but I stood at the bearish side for all these stories. For instance, I warned all why GMX was a great short candidate at $3.5 in March 2013. GMX went broke in late 2013 and the stock is at $0.12 as of today. Both ATP Oil & Gas and Delta Petroleum have gone broke too.....
No, I am not saying that Halcon will also go broke. However, the "Wilson premium" coupled with the Utica hype gave a tremendous valuation on Halcon in early 2013. To me, that rally did not have legs, because the company was fundamentally very weak. Halcon tried to bite off more than it could swallow, ignoring that the swallowing disorders would show up sooner or later.
The Bulls Have Been In Denial Since Early 2013
Back in early 2013, Halcon's bull parade was overcrowded. It was actually quite astonishing to me. Everybody was overtly and manifestly bullish of Halcon. Nevertheless, Halcon did not pass my initial "smell test". If I have learned anything after 25 years in the international markets, it is that when things get terribly one-sided, it is probably time to go to the other side....
AKK Price at posting:
1.2¢ Sentiment: Hold Disclosure: Held
