Peabody Energy Corporation (BTU)

[LouisDesyjr]

Holding above $2 for the moment but sliding

I am still amazed that the stock is holding up so well. While this week the stock seems to have shown some weakness, it is not anywhere near what I thought it would be showing considering that next week is the end of the grace period.

One seekingalpha article seemed to think that one reason the stock was holding up as well as it has was that with the reverse split there are a lot fewer shares out there. While, in theory, it should not matter how the ownership/common shares are divided up, everyone knows that at very low prices or very high prices there is some strange trading that goes on partly due to the extreme price.

A Win-Win Trade In Peabody Energy:
http://seekingalpha.com/article/3963737-win-win-trade-peabody-energy

So why is the stock still trading at $2.25/share and was actually up 9 cents on April 6th? It's difficult to say, but the price partially reflects the fact that there are only about 19 million shares outstanding after a 1-for-15 reverse stock split last fall, which reduced the shares from about 280 million.

Louis J. Desy Jr.

Disclosure: I own put options on BTU.