When is a Devon Energy stock buyback not a buyback?
A Devon Energy shareholder meeting in Brighton this week was marred by chaos.
The meeting was being called by the firm’s chief executive David Brown, who was attempting to convince investors of the company’s continued viability as a standalone energy provider.
A shortlist of potential buybacks had been compiled, and Brown was trying to convince the public that a sale was still possible.
But when the company announced plans to raise $3 billion by issuing a new stock offering, the crowd was not so convinced.
In a sign of the power of the social media response, hundreds of Twitter followers and Facebook friends quickly began sharing their opposition to the plan.
Twitter user @gloriousbritain tweeted: “It is time for a change.
It is time to start thinking outside the box and not just listen to the experts but think outside the bottle and take a stand.”
Some social media users, including the former head of the Australian Energy Market Operator (AEMO), David Kelly, also posted a series of tweets opposing the plan, including one from an angry investor who accused Brown of “selling out”.
“There is no alternative to a buy back,” the investor wrote.
“The government’s focus on coal is causing the problem of climate change.
David Brown is selling out and is taking on the biggest threat to our climate in Australia.
It’s time to stop the government from selling out on coal.”
Other Twitter users questioned the idea that an energy stock buy back was the only option to reverse the trend of declining fossil fuel use.
Energy stocks have been an important driver of Australian economic growth for decades, but the public is increasingly worried about the impact of climate-related risks and has become increasingly sceptical of the ability of the Abbott Government to deliver on climate change promises.
Last year, an independent review of the country’s energy sector found that fossil fuel prices have been at record highs for decades.
But the Government has continued to spend millions on new renewable energy schemes and coal-fired power stations, while other industries have struggled to adapt.
It’s been a tough few months for energy investors, with Devon Energy and the Commonwealth Bank both selling shares.
Investors who had backed Devon Energy have been given two options: either sell their shares, or buy them back from the government.
Brown has said he expects his share price to increase by $1,000 if he decides to sell out.
Devon Energy stock market watchers are already calling for a buyout.
Topics:energy-and-utilities,business-economics-and/or-finance,energy,climate-change,australia,united-states,canberra-2600,melbourne-3000,vicsource: the Australian Financial Journal