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How to punish Halliburton (HAL +3.7%) for destroying evidence? Add ~$1.4B to its market cap, as...

How to punish Halliburton (HAL +3.7%) for destroying evidence? Add ~$1.4B to its market cap, as shares surge at the open despite agreeing to plead guilty to destroying evidence in the wake of the Deepwater Horizon disaster. Investors may be focusing on HAL's launching of a $3.3B Dutch auction, through which the company plans to repurchase ~8% of its stock at a price likely above Thursday’s close.
Comments (13)
  • I would imagine that getting the fine behind them has removed uncertainty surrounding the stock; eliminating uncertainty is generally a positive event for a company's stock.
    26 Jul 2013, 10:03 AM Reply Like
  • Yes. The overhang around a criminal offense and its potential to drag HAL into the BP-Macondo issue even deeper was worrying investor. Note that the "maximum penalty" was small money to Halliburton; so a $55 million donation to Fish&Wildlife was utilized.
    26 Jul 2013, 11:18 AM Reply Like
  • The specific charge and fine are extremely important to understanding the level of culpability the DoJ considers Halliburton to have. In other words, BP - billlions, Transocean - hundreds of millions, HAL - a couple hundred thousand. Speaks volumes.
    26 Jul 2013, 11:27 AM Reply Like
  • DAG1996: Well put. My takeaway is that Halliburton conducted itself poorly in this case, admitted guilt, and accepted the penalties.

     

    However, this issue did not change the underlying BP-Macondo tragedy story line.
    26 Jul 2013, 11:55 AM Reply Like
  • Ray, I couldn't agree more. This tiny piece of the puzzle does not change the big picture and those responsible should feel the force of the law.

     

    It just really bothers me that so many people are so shallow and simple minded that they don't bother going beyond the headlines to understand what actually transpired and who is actually responsible. Way too many people hear/see nothing beyond the shock-value headline phrases like "plead guilty" and "destroyed evidence" and are immediately anxious to make ignorant claims without considering the more important details like what that so-called "evidence" was. I'm sure you've seen some of the stuff I'm talking about ... there are already articles actually arguing that Halliburton's CEO should go to prison! The bottom line is quite simple ... BP repeatedly behaved absolutely atrociously and, in order to satisfy political pressures, Halliburton had to be guilty by association ... of a misdemeanor.
    26 Jul 2013, 12:10 PM Reply Like
  • Well stated. TY for your clarity.
    26 Jul 2013, 12:44 PM Reply Like
  • Thank you for saying so.
    26 Jul 2013, 12:53 PM Reply Like
  • yvw. In fact, I'm wondering if you'd mind if I "borrow" some of your comments for another blog, either with or without your tag. They're caught up in the headlines.
    26 Jul 2013, 03:19 PM Reply Like
  • Not at all ... just please quote me accurately and share a link.
    26 Jul 2013, 03:22 PM Reply Like
  • Thx, Dag, and I will quote you accurately, combining your two posts. The original conversation(s) is on Gretawire.com. My own comments are under the name "Diane" and I'll forwarn you I included some comments on Holder. Subject: "Do you think Halliburton is getting off easy? Should someone go to jail?" and the following section, both from yesterday. I may doublepost that section and a current open blog.
    26 Jul 2013, 03:32 PM Reply Like
  • Dag, here is the complete post on Gretawire.
    A respected poster on another blog posted a few comments on the Halliburton settlement. His nic is DAG1996 and he has kindly given me permission to repost some of his comments here, with the promise I would quote him accurately.
    "The specific charge and fine are extremely important to understanding the level of culpability the DoJ considers Halliburton to have. In other words, BP - billlions, Transocean - hundreds of millions, HAL - a couple hundred thousand. Speaks volumes."
    and, in a separate reply: to (name not included without permission) " I couldn't agree more. This tiny piece of the puzzle does not change the big picture and those responsible should feel the force of the law.
    It just really bothers me that so many people are so shallow and simple minded that they don't bother going beyond the headlines to understand what actually transpired and who is actually responsible. Way too many people hear/see nothing beyond the shock-value headline phrases like "plead guilty" and "destroyed evidence" and are immediately anxious to make ignorant claims without considering the more important details like what that so-called "evidence" was. I'm sure you've seen some of the stuff I'm talking about ... there are already articles actually arguing that Halliburton's CEO should go to prison! The bottom line is quite simple ... BP repeatedly behaved absolutely atrociously and, in order to satisfy political pressures, Halliburton had to be guilty by association ... of a misdemeanor."
    and thanks again. A point well made is always appreciated.
    26 Jul 2013, 03:42 PM Reply Like
  • Could someone please comment re: the modified dutch auction Halliburton plans to hold and its relevance to the average small holder? Thank you.
    5 Aug 2013, 05:03 PM Reply Like
  • Jake2

     

    Your broker should send you a link with all the relevant data.

     

    The basics are that the company is offering to buy shares from existing stockholders. It is voluntary. There is no requirement to do anything.

     

    If you wish to sell, you can tender an offer between $42.50 and $48.50 (check the info to be sure). It's a Dutch auction-style deal.

     

    The size of your holdings is does not preclude anyone from participating. The company will buy shares up to $3.3 billion (again check the fact sheet) from any duly tendered shares that qualify under the Dutch auction rules.

     

    Bottom line, if you want to sell shares (some or all), this deal is a potential way to do so. It's possible to get more than the current share price. The share price today is about $46, so the auction boundaries run both above and below today's price.
    5 Aug 2013, 05:25 PM Reply Like
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