Carl Icahn & Transocean – a quick look at what’s been happening lately

Just revisiting a post I published in January following the news that Carl Icahn was building a stake in Transocean and thought I would update the story. Since I wrote that article Transocean decided in May to pay a 5% dividend (USD 2,24) vs. the USD 4 Carl Icahn was fighting for. That brings his break-even for the position close to CHF 40-42. That also coincides with where the stocks multi year lows were marked. A strong support zone from a technical analysis perspective. The veterans looking at technical indicators at the time of the news flow regarding his position and pointing out that the stock was stretched turned out to be right. The stock was unable to clear the CHF 54 region. Part of the story here is USD related though. In USD the stock is trading at close to 49 vs the CHF 44 here in Switzerland. The top coincided with the USD/CHF at 0.97, now the FX rate is at 0.89, a drop of nearly 10%. So if you invested CHF you’re down, even including the dividend, if you bought following his entry. Note that the stock nearly reached USD 60 in February 2013, the high was USD 59.50.

This headline crossed the wires on Oct 21st and is probably a good sign for liquidity and media coverage:

21-10-2013 23:43 en djnw Transocean to Replace Dell in S&P 500 After Market Close on Oct. 28 -CNBC

Icahns‘ activity has been subdued in comparison to his fight with Apple:

14-08-2013 23:46 en djnw *DJ Icahn Reports Higher Stake in Transocean -Filing

Rating activity has been a mixed bag with more analysts cutting than raising with the notable exception of S&P Capital IQ.

16-10-2013 17:24 en djnw *DJ Transocean Cut to Underperform From Mkt Perform by BMO >RIG
20-08-2013 15:54 en djnw *DJ Transocean Cut to Neutral From Buy by UBS >RIG

 

09-08-2013 14:55 en djnw *DJ Transocean Cut to Neutral From Buy by Global Hunter Securities >RIG
08-08-2013 21:19 en djnw *DJ Transocean Raised to Buy From Hold by S&P Capital IQ >RIG
02-07-2013 14:31 en djnw *DJ Transocean Cut to Neutral From Buy by Citigroup >RIG

 

 

Charts:

transocean-3-year-chart-2010-2013-carl-icahn

transocean-2013-carl-icahn

 

 

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