The Case Of PetroChina, The Worst Stock Slump Ever

The unofficial title of the world's worst stock slump is awarded to

PetroChina Company Limited (ADR)

PTR

Bloomberg reported. China's state-owned energy producer also holds the title of being the first trillion-dollar valued company, but that was back in 2007, and the company is worth just north of $200 billion today. By dollar amount at least, the loss of $800 billion of market value represents the largest elimination of shareholder wealth. Granted, by percentage decline there are bigger losers than PetroChina, such as DryShips Inc. DRYS. The stock is down around 99.9 percent over the past 12 months.

Nevertheless, the elimination of $800 billion in shareholder value represents a dollar amount that is larger than Microsoft Corporation MSFT's entire market cap of $608 billion and the estimated U.S. fiscal 2017 budget deficit of $668 billion.

PetroChina's stock has been crushed due to economic policy shifts the Chinese government has made over the past decade, Bloomberg said. For example, the government shifted away from a commodity-intensive development model and cracked down on "speculative manias," which helped boost the stock above the $1 trillion mark in the first place. Of course, the 44 percent decline in oil prices over the past 10 years contributed to the stock's sell-off over the years.

But investors hoping for a rebound in PetroChina's stock may want to reconsider, at least according to Toshihiko Takamoto, a Singapore-based money manager. He told Bloomberg that PetroChina's stock still looks expensive as it is trading at 36 times earnings. By comparison, Chevron Corporation CVX's stock is trading at 25 times earnings and Exxon Mobil Corporation XOM at 22 times earnings.

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