I know someone out there will be able to answer this. If we get rid of OxyChem and use the proceeds to pay down debt how does that affect the stock price and market cap. Right now our market cap is appx 44 billion. If we are losing such a large asset does that affect our actual overall worth? I know if the cost per share goes down the market cap does as well, but since we sold such a large asset would it not bring our true value down. Add in the debt and we should have an enterprise value of around 60 billion after debt is paid down.
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It’s a difficult transaction to fully understand. Essentially selling a strong cash flow business to pay down the debt OPC took on to acquire a business with less attractive cash flow. Perhaps suggests that there is not enough for 2026 CAPEX and financial institutions raised concerns about further trending the line of credit. If 80% of success in life in timing, this timing looks unfavorable. But then Vicki managed to navigate the company through Covid despite the APC acquisition.
The market has spoken. Stock down 7% today.
@ar We need someone to comment about the queen, dear leader, or Piper Alpha. Wake up out there!
@a1 Very good well thought out accurate answer. Are you sure you’re on the right site?
It depends. If the valuation was done correctly, meaning the true value being $9.7B it depends on how you use that money, if repaying debt you may get more from that than keeping OxyChem. If it was sold undervalued you are destroying market cap, it all depends on the valuation and how you use those proceedings from the sale. Market Cap is more linked to stock price times number if shares, it seems the market is not positively reacting to the sale, but time will tell.