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Freeport McMoRan (FCX) -2.5% premarket after receiving downgrades from at least a half-dozen...

Freeport McMoRan (FCX) -2.5% premarket after receiving downgrades from at least a half-dozen firms, including Deutsche Bank, RBC, Goldman, Citi, Macquarie and BMO. The moves reflect investors' nasty mood that sank shares 16% yesterday following FCX's decision to engage in a diversification strategy that results in near-term earnings dilution and provides no apparent synergies.
Comments (11)
  • frosty
    , contributor
    Comments (712) | Send Message
     
    The top executives are lining their pockets with $500 million they are stealing from stockholders. They should be sued or prosecuted for fraud. This sham deal is not in the best interests of FCX stockholders and is a violation of their fiduciary responsibility. The deal should be aborted. Or if they really feel this is such a great deal they should forego their payout and give it as a special dividend to stockholders and rely on future growth for their ultimate payout.
    6 Dec 2012, 09:17 AM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    I doubt the intent of these deals was for management to line their pockets. Obviously shareholders must hold management accountable if there is any evidence of this impropriety, which would be a shirk of shareholder fiduciary duty. FCX gained new shareholders yesterday on these deals.
    6 Dec 2012, 02:50 PM Reply Like
  • Doug Woolsey
    , contributor
    Comments (2) | Send Message
     
    Doug Woolsey

     

    What wrong with diversification BHP & Rio Tinto are in the energy business
    6 Dec 2012, 09:33 AM Reply Like
  • MDHJr
    , contributor
    Comments (76) | Send Message
     
    this deal is incestuous! For once, I hope the lawyers show up to block it.
    6 Dec 2012, 11:31 AM Reply Like
  • tarzan46
    , contributor
    Comments (5) | Send Message
     
    ...never has there been a better reason for shareholder revolt...the board of directors should be exorcised...and the management dismissed ...one can only hope there are enough shareholders of influence left to reverse this insanity.....
    6 Dec 2012, 01:49 PM Reply Like
  • Seth Walters
    , contributor
    Comments (676) | Send Message
     
    Diversification is smart. Gold prices won't stay high forever. Copper is recycled and has its booms and busts. Oil and gas on the other hand, are consumed, and we aren't making much more of them.
    6 Dec 2012, 02:12 PM Reply Like
  • PM's Rock
    , contributor
    Comments (136) | Send Message
     
    Seth, Just asking, but do you think this is a good move for FCX. I appreciate your response.
    6 Dec 2012, 02:17 PM Reply Like
  • Seth Walters
    , contributor
    Comments (676) | Send Message
     
    Yeah I do. They got ahold of some good real assets for the price of a little bit of dilution (which isn't really dilution as its being used to buy assets) and issuing some debt. Debt financing is dirt cheap now. And look at Cliffs natural resources if you want an object lesson in the costs of not being diversified.
    6 Dec 2012, 02:35 PM Reply Like
  • Seth Walters
    , contributor
    Comments (676) | Send Message
     
    In an age where the us govt is so far in debt that financial repression, inflation, and or default are the only ways out, running up debts to buy income producing assets is the smartest thing you can do in my eyes.
    6 Dec 2012, 02:43 PM Reply Like
  • PM's Rock
    , contributor
    Comments (136) | Send Message
     
    Thanks Seth. I agree with your comment and picked up more shares to average down a bit. I have a small stake in FCX, but I agree long term this should pay off.
    7 Dec 2012, 08:48 AM Reply Like
  • Jaldsa
    , contributor
    Comments (3) | Send Message
     
    Agree with the diversification, shareholders must look the long term
    6 Dec 2012, 03:22 PM Reply Like
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