Massey Energy Company (NYSE: MEE) has been thrashed since its catastrophic mine explosion. Shares were near a 52-week high when this came about, and things have gone far south from then. NPR reports of an FBI investigation is actually not that shocking on the surface, but with all accidents that result in this many deaths you just will not know the extent of any investigation. Massey has not exactly defended itself. But it did respond to the NPR reports about a FBI investigation, where NPR reported that the FBI is looking into possible bribery of officials of the Mine Safety and Health Administration.
The company noted, “Massey has no knowledge of criminal wrongdoing…. It is not uncommon that an accident of the size and scope of UBB would lead to a comprehensive investigation by relevant law enforcement agencies…. We are cooperating with all agencies that are investigating the tragedy at UBB. Massey does not and will not tolerate any improper or illegal conduct and will respond aggressively as circumstances warrant.”
Again, the reports discuss criminal activity via bribery and that is what had hurt the company whether the official statement said the company “will not tolerate any improper or illegal conduct” or not.
The 52-week high was $54.80, but the after-effects, rumors, and scary notions for shareholders ahead have all led to the stock heading south. The report of a FBI investigation has taken off another 7.7% today with the stock down nor around $38.00 on more than 54 million shares.
Massey is also said to have offered mine victims’ families $3 million each as a settlement. Whether or not they accept, that is another issue. This tragic story is one that is far from over, and the news flow so far is not going in Massey’s favor at all.
Massey’s drop has so far not killed the sector via the Market Vectors Coal ETF (NYSE: KOL), but it is certainly not helping it. That ETF has a 52-week high of $41.55 and is down 1.7% at $37.59.
This puts the ETF only about 10% down from highs, while Massey is off about 30% since the incident.
JON C. OGG
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