Weatherford is in need of capital, but not for an acquisition. Its declining EBITDA is a problem. Moody's suggested that if the company's debt/EBITDA remains at 4x or higher, it may trigger a ratings downgrade. It would behoove the company to raise capital now before the rating agencies require it to.
Secondly, in October, the company's auditors are expected to perform an impairment test on Weatherford's $3 billion in goodwill. Of that amount, about $2 billion is related to its underperforming North American operations. In Q2, North America had $5 million in EBITDA and a $92 million operating loss. If the company's $105 million in corporate costs and R thus, the stock sold off. Now the smart money will likely focus on Q3 earnings, which are likely to disappoint, and WFT's intrinsic value, which I estimate at $4.