We are investigating Valaris plc (VAL) (“Valaris” or the “Company”) for potential violations of the federal securities laws.
On April 11, 2019, Ensco plc and Rowan Companies plc merged to form Ensco Rowan plc, which was touted as an industry-leading offshore driller. On July 2, 2019, Ensco Rowan plc announced that it will change its name to Valaris plc, effective July 31, 2019. On July 31, 2019, Valaris announced its second quarter 2019 results—its first earnings report post-merger. The Company’s financial results missed market expectations and “shock[ed] investors with massive cash usage [and] surprisingly weak outlook for the ultra-deepwater segment with further dayrate recovery likely delayed until at least the second half of next year.” Moreover, the Company’s free cash flow for the quarter was “negative by a whopping $375M, causing the company’s remaining pro forma cash balance adjusted for roughly $741M in payments related to the recent debt tender offer to decline to just $353M.” On this news, Valaris’ stock price fell, $3.25 per share, or approximately 39%, over the next two trading days, to close at $5.02 per share on August 2, 2019.