Wall St. has gone from hating financial firms with bad balance sheets to hating all companies with big pools of debt.
With the crisis which has evolved over the last few day, debtophobia has gotten progressively worse.
Some cases in point:
Charter Communications (CHTR) with $19 billion in debt and a new $1 billion junk financing is off almost 4% to $.72, near a 52-week low and down from a period high of $4.93.
Boston Scientific (BSX) took on a huge debt load when it bought Guidant. Operating income has been weak. Shares are off almost 3% to $12.20.
Level 3 (LVLT) never met a financing it did not like. Took on piles of obligations while perpetually shopping for new M&A targers. Traded to a 52-week low today at $1.68.
AMD (AMD) took on about $5 billion when it bought ATI. Today the stock moved down 2.3% to within a dollar of 52-week low.
McClatchy (MNI) added debt when it bought rival newspaper chain Knight-Ridder. Shares hit a new 52-week low today at $8.33.
Debt, be not proud.
Douglas A. McIntyre