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There is a fast-unfolding controversy involving Sable Offshore Corp. (NYSE:SOC), an Exxon Mobil Corp. (NYSE:XOM) spin-off, centered on potentially leaked insider information and financial pressures. Sable shares tumbled Monday as new developments came to light.
Last Friday, Hunterbrook published a report alleging that Sable's CEO Jim Flores leaked key, nonpublic company information to select investors—including golfer Phil Mickelson—regarding urgent funding needs and regulatory matters related to Sable's offshore oil project.
Benzinga has reached out to all involved parties and has not received a response.
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Hunterbrook's report shows Mickelson was relaying material updates from Flores to investors via private group chats. However, Mickelson denies trading on or misusing the information, calling the report "slanderous."
Sable held an emergency public call for investors on Monday morning and declared it was creating a Special Committee to examine reports from Hunterbrook Media.
On the call, Sable essentially confirmed some details of Hunterbrook's investigation, revealing a need for roughly $225 million in new equity to extend its Exxon loan. Sable stated this fundraising would reduce current shareholders' stakes by about 20%, based on an $8.30 share price at the time.
The plan to raise funds had not been broadly announced before, though some investors had allegedly learned about it in a private October call.
A leaked audio recording of that call was released by Hunterbrook last Friday. On Monday, Sable said the $225 million is necessary for the loan extension—without it, Exxon could repossess Sable's only asset for no cost.
Hunterbrook Media released an updated report following Sable's Monday morning call with investors. Hunterbrook Capital is now short SOC shares based on Hunterbrook Media's reporting.
SOC Price Action: According to Benzinga Pro, Sable Offshore shares were down 22.9% at $8.06 at the time of publication Monday.
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