Fri 22 Jun 2007
One of my holdings, Rosetta Resources (ROSE) took a bit of a tumble yesterday…? the shares closed near their lows of the day down 8.4%.
The interesting thing is that this happened on ?no news?.? About a month ago the price spiked upward on a Cramer recommendation when he called the stock ?criminally underpriced?.? Yet this wasn?t a Cramer-ism, the dip wasn’t because of something he said.? Rosetta is a natural gas producer, maybe it?s falling because of the short-term breakdown in the natural gas price?? Not really… all the gas producers, including Rosetta, were weak over the last few weeks and it doesn?t really explain the one day plunge.
The real story?? Calpine is suing Rosetta for $400 million.? For perspective, Rosetta?s market cap is $1.2 billion, so we?re talking about almost 33% of the market cap of the company.? Rosetta was originally spun off from Calpine, and now the parent company thinks they weren?t paid enough for that privilege (there are many sordid details, including the fact that Calpine is currently in bankruptcy and only realized the underpayment now that third parties are seeking to cover their debts).
While the soap opera will likely continue for a while (it?s a money grab, after all) the interesting point is that this news didn?t show up (and still hasn’t) on Yahoo Finance?s news for the company, nor in Google Finance nor Google News.? I only found the story when I logged into my Schwab account and reviewed the news listings that Schwab had for the company.
The lesson to take away from all of this is to make sure you have several places to go for your news…? especially if you expect to act based on news for a company or stock.? Also, Yahoo Finance and similar free services are great, except when they aren?t.?