Special Interest Stocks 14/12/2010

AGL was hammered today, down 4.92%. More importantly, it finished at the low for the day. So smart money wasn't interested in buying into this stock.

Looking at the stock (big drop down on high volume, close at low of the day), I would think it will be some time (weeks?) before this stock can recover. I might be wrong. For AGK stock holders, I hope so.

The stock is now close to an important support level (around $15). If it drops below that, I would think further significant drops in price will occur.

Why did AGL fall? Here's their announcement to the market before it opened this morning:

AGL Energy Limited (“AGL”) confirms that it has not acquired any assets in the New South Wales government’s sale process for its energy retail businesses and electricity gentrader contracts.

AGL has consistently stated throughout the sale process that it would benchmark any bids for assets against the alternative of pursuing a strategy of organic growth given the strength of the AGL business in New South Wales. AGL has also said it would only bid for assets at prices that achieved the required returns for shareholders. AGL’s bids for assets were at prices consistent with this principle.

AGL already has a strong market presence in New South Wales with more than 1.1 million customer accounts. AGL now intends to pursue the alternative strategy of leveraging its market position, its strong brand and its operational platform to drive organic customer growth in New South Wales and deliver a superior outcome for its shareholders.

Plans are also well advanced for the construction of new gas fired electricity generation plant in New South Wales.

Costs of approximately $13 million incurred during the bid process will be included as a significant item in the FY2011 interim results.