Activist investor Carl Icahn (Trades, Portfolio) of Icahn Capital Management LP sold out of Seventy Seven Energy Inc. (SSEIQ, Financial) on Aug. 1.
Seventy Seven Energy is an oilfield services company based in Oklahoma City that provides well site services and equipment to U.S. land-based exploration and production companies. Its services include drilling, pressure pumping and renting oilfield tools.
Icahn sold 4,746,421 shares of Seventy Seven for an average price of 11 cents per share. The company has a market cap of $6.5 million with an enterprise value of $1.5 billion. It has a P/B of 0.1 and a P/S of 0.01. GuruFocus ranked its financial strength 3 of 10 and its profitability and growth 3 of 10.
As an activist investor, Icahn takes stakes in public companies and pushes for change. Typically, he buys companies with low favorability, usually right out of bankruptcy, fixes them up and sells them when the stock is more favorable. He has been involved with Seventy Seven prior to the second quarter of 2014.
On May 8, Seventy Seven filed for bankruptcy protection with $1.73 billion in debt and $1.78 billion in assets. The company cited the decline in the oil and gas industry as a factor in their eroding revenues. Seventy Seven is not alone, nine Oklahoma energy companies filed for bankruptcy protection between September 2015 and May 2016.
On Monday, Seventy Seven announced it has completed its restructuring and has emerged from Chapter 11 bankruptcy. Following the company’s announcement, Icahn released a statement that said he canceled all outstanding shares.
Disclosure: I do not own stock in any companies mentioned.
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