SDRL Stock Slumps 30% in Four Sessions: Should Investors Be Nervous?

SDRL stock

Over the past few weeks, offshore oil drilling company Seadrill Ltd (NYSE:SDRL) has been in the news for having signed important deals, and SDRL stock price improved considerably on Monday. Moreover, the troubles in Saudi Arabia and the rising price of oil also resulted in a surge in Seadrill stock earlier this week.

However, for the rest of the week, the stock has proven to be extremely volatile and has corrected as much 30% over the past four trading sessions.

SDRL Stock Turns Volatile

At the beginning of the week, Seadrill stock started off well, but as the week progressed, things started getting worse for the company. Moreover, there is no conceivable reason why the price of the stock fell by that much throughout the week. The situation has not improved much in Saudi Arabia, and although oil prices fell somewhat after the incredible rise on Monday, it cannot be the reason behind the sudden dive in Seadrill stock. There were no announcements from any of the company’s rivals either that could have affected SDRL stock price like that.

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The situation with SDRL stock is another indication of the sort of volatility that investors can expect in the energy sector. Over the course of the past year, the company has burned $291 million as it tries to deliver improved results after having declared bankruptcy a year ago.

That being said, the company has made significant moves over the past months and has reduced its debt considerably to $7 billion. In addition to that, it has also signed important deals that will result in steady cash flow over the long term. However, at this point in time, things are a bit sketchy, and it would be better if investors wait for some time before considering an investment in SDRL stock.

At the time of writing, SDRL stock is down 7% at $2.39. Moreover, the stock is one of the biggest losers in the energy sector, with a slump of 75% so far in 2019.

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Featured image: DepositPhotos © Iurii