After significant price falls, many stocks are interesting from an investment point of view. Origin is not one of those stocks. Based on news yesterday, Origin is a stock to avoid. Despite previous assurances, Origin announced measures to cut debt by $5 billion, including a $2.5 billion capital raising and a major cut to capex.
A measure of the management failure this announcement represents is that the stock was already trading at nine year lows beforehand. It appears the board and management are the last to realise Origin’s difficulties. In essence, Origin bet that gas prices would hold at higher levels, and had no plan B. Now, it has little choice but to beggar investors for more funds.
Admittedly, a share price that is 60%+ lower attracts attention. However, the recent experiences of Myer shareholders are a cautionary tale for those holding Origin. It’s difficult to see how many members of the current membership team could possibly keep their jobs. This sort of strategic failure demands C-suite change – and investors may be well advised to shun Origin until this occurs.