The St. Joe Company (JOE), a publicly-held operationally diversified real estate company, has recently filed a lawsuit against M-I Swaco, a worldwide drilling company, for its alleged role in the Deepwater Horizon Oil Spill in the Gulf.
The legal suit is an effort by the company to compensate either partly or wholly the substantial decline in its enterprise value faced with direct costs, an interruption to its business, and the diminution in the value of its assets. This is the second such lawsuit filed by St. Joe since the Deepwater Horizon incident. The company had earlier filed a legal suit against Halliburton Company (HAL) for its gross negligence in duties.
M-I Swaco was hired by BP Plc (BP) as the drilling fluid contractor for the Deepwater Horizon drilling rig. According to the lawsuit, M-I Swaco failed to report a series of regulatory violations that should have led to a suspension of operations on the rig. These violations displaced the heavy drilling mud from the well with lighter seawater leading to an explosion that resulted in the largest oil spill in the U.S.
St. Joe is one of the largest real estate developers in Florida. The company is currently in a defensive mode and continues to reduce capital expenditures through stringent cost-cutting measures and reduction in operating expenses. The company has recorded huge asset impairment charges related to write-down of assets, and has reported losses for five consecutive quarters.
Currently, St. Joe carries a Zacks #4 Rank, which translates into a short-term Sell recommendation and indicates that the stock is expected to underperform the overall U.S. equity market for the next 1-3 months. We maintain our long-term Neutral rating on St. Joe.
ST JOE CO (JOE): Free Stock Analysis Report
Zacks Investment Research
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M-I Swaco was hired by BP Plc (BP) as the drilling fluid contractor for the Deepwater Horizon drilling rig. According to the lawsuit, M-I Swaco failed to report a series of regulatory violations that should have led to a suspension of operations on the rig. These violations displaced the heavy drilling mud from the well with lighter seawater leading to an explosion that resulted in the largest oil spill in the U.S.
St. Joe is one of the largest real estate developers in Florida. The company is currently in a defensive mode and continues to reduce capital expenditures through stringent cost-cutting measures and reduction in operating expenses. The company has recorded huge asset impairment charges related to write-down of assets, and has reported losses for five consecutive quarters.
Currently, St. Joe carries a Zacks #4 Rank, which translates into a short-term Sell recommendation and indicates that the stock is expected to underperform the overall U.S. equity market for the next 1-3 months. We maintain our long-term Neutral rating on St. Joe.
ST JOE CO (JOE): Free Stock Analysis Report
Zacks Investment Research
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