Frontline's Beat 'Irrelevant' for Stock -- Market Talk
DOW JONES & COMPANY, INC. 6:43 AM ET 08/29/14
6:43 EDT - Frontline's (FRO) narrower-than-anticipated 2Q core loss didn't matter yesterday to investors. What did, notes Evercore, is the oil-tanker firm's board doubting "that cash from operators will be sufficient to repay its $190M convertible bond at maturity in April and that it needs to consider further equity raises, asset sales or 'a full restructuring of the company'--none of which would be favorable to equity holders." So the bear cuts its price target another 20% to $2 as "FRO's balance sheet and older fleet will preclude it from reaping similar rewards" through next year from higher tanker rates as will "most of its peers (if any at all)." FRO, which skidded 13% yesterday to $2.25 and undid the rebound seen earlier this month, has slumped 40% this year. (kevin.kingsbury@wsj.com; @kevinkingsbury)
(END) Dow Jones Newswires
08-29-140643ET
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