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Patriot Coal Corporation (PCX) was in focus Wednesday morning, thanks to some management shake-ups announced late Tuesday night. The company said that Paul Vining, who serves as president and chief operating officer, will step down effective immediately. However, Vining will do his part to ensure a smooth transition by staying on in a senior advisory role, potentially through the end of the year.
In order to fill the two roles left vacant by Vining, CEO Richard Whiting will now add the title of "president" to his resume. Meanwhile, Senior Vice President of Corporate Development Charles Ebetino Jr. scored a promotion to chief operating officer.
"Chuck's prior management experience, combined with his operating background and specific knowledge of Patriot's operations, make him an excellent fit for this position," said CEO Whiting in a company press release. As for departing executive Vining, the CEO said, "We certainly wish him well with his future endeavors."
PCX shed more than 4% in morning trading as a result of this news, with the stock deepening its year-to-date deficit of about 33%. Since late April, the shares have been pressured consistently lower by resistance at their 10-week moving average -- and now, PCX is flirting with a breach of the round-number $10 region. The equity slipped into single-digit territory right out of the gate this morning, marking its lowest price since September 2009.
Options players have been quick to react to PCX's technical tumble, with put volume rocketing to nine times the norm during the first 90 minutes of the session. The stock's December 10 strike is most active, with 2,760 contracts changing hands. Implied volatility on the option has inched higher as a result, suggesting that a good portion of the day's volume is buyer-driven. In other words, speculators seem to be betting on additional losses for PCX through the end of the year.
Elizabeth Harrow is a senior equities analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.
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