The Five Dumbest Things on Wall Street This Week: May 4
If that didn't get the Starbucks founder to wake up and smell the coffee about associating with an adolescent like Mason, then we don't know what would.
4. Houston's Problem
Houston American Energy(HUSA) , we here at the Dumbest Lab have a problem. You keep digging holes for your shareholders instead of your oil wells.
Shares of the small-cap energy producer sank 13% on Thursday to $1.93 after it announced it was selling stock and warrants in order to raise $13.1 million. The offering is only the latest gut shot for Houston American shareholders, who have seen their stock fall from over $12 at the start of the year to its current single-digit level.
The stock's first leg down began on March 1 when the company announced delays in a Colombian well, and claimed that further analysis of the well's potential would be forthcoming. Not wanting to stick around for the results, Houston American shareholders unloaded the stock, dropping it from $10.84 per share to $7.00.
The next major slide started soon after. On March 16, CEO John Terwilliger tried to rally shareholders by telling them that the bankruptcy rumors on the message boards "are wholly unfounded" and that the company has "a valuable portfolio of prospects."
Come on Terwilliger, that's just terrible! What kind of CEO responds to message board chatter? Actually, forget the question because we already know the answer: A dumb one.
Then on April 19, all of this insanity came to a head when Houston American announced it was terminating efforts to test its questionable Colombian well, possibly because of formation damage while drilling. (So much for those "valuable" prospects, huh John?) Furthermore, the company admitted it received three subpoenas from the SEC for testimony from the CEO, CFO and for delivery of certain documents.
That knocked the shares down from $3.50 to the $2.25 range and unleashed the class-action lawyers, whose suits against the company have been piling up ever since.