Smithfield's shares fall, rally on financing news

Shares fell more than 17 percent earlier in the day, setting a new 52-week low of $13.98 before rebounding Friday afternoon. The stock fell 53 cents, or 3 percent, to close at $17.11

The Smithfield, Va.-based company's stock is off about 47 percent from its 52-week high of $32.26 reached in May.

Late Friday the company said in a news release rumors in the marketplace are "unfounded" and that it continues to meet liquidity requirements by lenders.

The company said as of Thursday, it had more than $500 million in liquidity from committed lines of capital.

Smithfield also sought to assuage fears about its hedging positions.

On Thursday, Stephens Inc. analyst Farha Aslam wrote in a research note that there's concern for the business because of heavy hog inventories and the possibility that exports may be slowing down. Prices for hogs could fall too, and if that happens and the company hasn't hedged production, the business could slump, she wrote.

But Smithfield said it has hedged.

"The company has historically been active in the commodities markets as a management technique and is very comfortable with its current hedging positions, which it expects to be favorable to the company's results in the current quarter," it said in a news release.

The protein market was shook up on Thursday after Pilgrim's Pride Corp., the nation's largest chicken producer said it expects to report a "significant loss" in its fiscal fourth quarter and is so weighed down by debt it may not meet the terms of its loan agreements. That means it could face issues with financing going forward.