I am somewhat puzzled by this recent news. I understand the "asset value" argument, but doesn't the market decide that? There has to be other reasons, I just don't know exactly what they are. Owning 8.5% of a company like Sandridge is a very material position. I know he has money he has to put to work, but why in SD, it seems risky unless he sees/knows something the rest of us don't (???). Cooperman is aggressive, but not one to make blind gambles. I think SD has spotted a "honey hole" of oil somewhere in the ML play, because so far the ML has been less than gold mine.
I think people are becoming a little too concerned about finding wells that rival some of the best plays in the country. In the ML they will find the sweet spot and have "decent" well results. The difference is how cheaply SD can drill in the ML. All the infrastructure it already has in place also boosts its value. The company is easily profitable because I think it will be one of the lowest cost producers out there. The risk on drilling these wells and missing is not the detrimental. I think as an investor with the stock price it is the same way. This company has very little downside risk in my opinion. I think that is what Cooperman sees. Just drill the ML with low risk, be profitable, and the stock price should appreciate.
If SD was such a great deal or had a nice surprise in order, you would think TPG would know and be buying like crazy, but there not! So, perhaps Mr. Cooperman is simply gambling cause the market or SD's new management surely doesn't agree with him at this time in regards to SD. Also, there has to be a good reason for the massive shorting of SD and increasing with every month.