How Low Can Massey Energy (MEE) Go?

Massey Energy (MEE) had the biggest price decline of any stock on the New York Stock Exchange. Massey plunged $6.24 as shares dropped 11.4% on news of a coal mining explosion in West Virginia. Standard & Poor's announced that Massey Energy may undergo a ratings cut over the mining accident. S & P believes that "uncertainty exists regarding the impact on the company's worker's compensation liability and any impact potential lawsuits brought against the company may have on its overall financial profile." Standard & Poor's estimates that the disaster could cost Massey $50 million dollars in earnings. Next year's earnings were expected to grow over 80%. The growth rate will obviously be affected by the latest accident. The stock may be a good short candidate as the company's image has taken a huge hit. CEO Don Blakenship is under fire for allowing lax standards and repeated safety violations at the West Virginia coal mine. Massey (MEE) will clearly face greater regulation from the West Virginia government and the federal government. Stricter mining regulations would directly impact productions. With all of the potential negative consequences, Massey might make an interesting short candidate.