CHARLESTON, W.Va. - Investors cheered the abrupt retirement of Massey Energy Co.'s chief executive Monday.
Massey's shares outpaced most major U.S. coal stocks, before backing off to close up $1.21, or 2.4 percent, at $51.63.
The troubled Richmond, Va.-based coal company announced Friday that longtime chief Don Blankenship intends to retire Dec. 31, giving investors a full weekend to ponder the news.
"It may increase the chances that Massey could be merged or acquired," said Michael Dudas, an analyst with Jefferies & Company. "Now they're moving on with an acquisition. The stock has reacted very favorably."
Massey announced last month that it was reviewing options for increasing shareholder value. Typically, that's interpreted as an effort to sell a company, but Blankenship was considered by some an impediment to striking a deal.
Former director Daniel Loeb, founder of New York hedge fund Third Point, claimed in his letter of resignation in 2007 that Massey's board declined a proposed merger because the deal would have required Blankenship to leave.
Sen. Joe Manchin said he hopes Massey finds a U.S. buyer that will help retain jobs in West Virginia.
"Massey has an awful lot of good, quality workers throughout the state, and I hope they're able to continue their employment. So, we're kind of watching and monitoring that. I'm understanding that there are quite a few companies that are looking at it," Manchin said. "I've been very hopeful that one of our domestic companies are able to continue that, or become involved in that process."
The turnover comes as Massey struggles to recover from the April 5 explosion that killed 29 miners at its Upper Big Branch mine some 50 miles south of Charleston. The blast was the deadliest in the U.S. coal industry since 1970, and is the subject of criminal and civil investigations.
Massey and Blankenship have not responded to requests for an interview. However, he told television station WCHS that he just thought it was time to retire and he's not worried about the Upper Big Branch investigation.