I try to check on the portfolios every couple of days and also watch for news stories about our portfolio companies. Today I saw the following article about our natural gas company Anadarko with the scary title “Anadarko to Pay $5.15 Billion in Largest Ever Environmental Contamination Settlement”. This sounds like bad news, right?
When I checked on the stock price, it had gone up by almost 15% on news of the settlement. Apparently the market had already “penciled in” a much bigger cost and this was viewed as “good” news.
On the other hand, Twitter has been going down recently on various negative news and analyses. Since the stock is so highly valued, as a multiple of revenues and profits, any sort of analytical approach can come up with widely different results (by contrast, a company such as Exxon generally trades within a narrower range).