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Last week: "The suggestion of any conflicts of interest is unfounded." Today, Chesapeake (CHK)...

  • Thursday, April 26, 2012, 8:59 AM ET
    Last week: "The suggestion of any conflicts of interest is unfounded." Today, Chesapeake (CHK) says it won't extend its Founder Well Participation Program, which indirectly facilitated up to $1.1B in loans taken out by CEO Aubrey McClendon. "The board did not review, approve or have knowledge of the specific transactions engaged in by Mr. McClendon or the terms of those transactions." CHK -1.8% premarket.
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This news story has 20 comments:

  •  
    I will say this again, as long as McClendon is around, i wouldn't touch this company, too many shenanigans.
    26 Apr 2012, 09:02 AM Reply Like
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    Couldn't agree with you more. Integrity of corporate executives is a critical factor in determining appropriate investments.
    26 Apr 2012, 12:33 PM Reply Like
  •  
    I've been investing in CHK for about 10 years and think I know this company pretty well.

    First, most of the negative comments here show a hasty judgment after reading the headlines and a lack of detailed knowledge of the company.

    Second, Aubrey has brought this company from nowhere to the second biggest gas producer in the US. Along the way he has made me a lot of money. I do not begrudge him a big payday.

    Third, the well investment program was approved by the stockholders.

    Fourth, his loans, as I understand it, come from a third party not Chesapeake and are secured by his interest in the company wells. There may be a small conflict of interest in that the third party does business with CHK.

    Fifth, what did you think you were buying when you invested in CHK? Ma Bell? This is a high risk industry!

    Sixth, if you had done any due diligence when investing in these shares you would have known that Aubrey is a high risk individual that aims for the fences. Do you want a button downed banker running this company? If he had been that type this company would be one of a thousand little E & P energy companies dotting the landscape instead of a giant with millions of acres under lease and thousands of wells in hand.

    If you were a good investor you would recognize this fiasco as an opportunity to buy shares cheaply while there is all this controversy and the price is cheap. There are no guarantees in investing but I like to buy when everyone is screaming and sell when everyone thinks the shares are going to the moon.

    Just my 2 cents!
    26 Apr 2012, 03:46 PM Reply Like
  •  
    I'm not sure why you think I lost money on CHK. I have never owned the shares. I would only consider this company for a short sale. My only point was that integrity of the companies management is one of my critical factors in deciding on an investment. This company does not meet my standard.
    27 Apr 2012, 11:37 AM Reply Like
  •  
    What is the problem, just remove him today. I said before, this board is completely spineless.
    26 Apr 2012, 09:02 AM Reply Like
  •  
    Its pretty obvious the board knows nothing...
    26 Apr 2012, 09:10 AM Reply Like
  •  
    Time to remove the CEO....make him 'President Emeritus' or some other fancy title - but time to get the company back on track.
    26 Apr 2012, 09:40 AM Reply Like
  •  
    Fire this MFer!
    26 Apr 2012, 09:55 AM Reply Like
  •  
    Sounds like the board needs to be sacked.
    26 Apr 2012, 10:28 AM Reply Like
  •  
    The board is naive or incompetent.
    26 Apr 2012, 10:56 AM Reply Like
  •  
    Or partially complicit, and now trying to cover their butts.
    26 Apr 2012, 11:01 AM Reply Like
  •  
    Dan Loeb, where are you!!!!! Buy a ton of shares, can the board, fire the CEO, work to raise return on assets, and watch this stock double in a year.
    26 Apr 2012, 11:01 AM Reply Like
  •  
    dont forget to continue expanding into crude and ngls
    27 Apr 2012, 09:08 AM Reply Like
  •  
    Don't forget Carl Icahn took a position in CHK in late 2010. Stock had a nice run as we all thought Carl would shake things up on the board. Wonder why Carl sold his position?
    26 Apr 2012, 11:38 AM Reply Like
  •  
    Maybe he saw McClendon was entrenched with the board and was not to be trusted. I believe his stake in CHK got as large as 5%, but then he started selling. In addition, the stock had a big run while he owned, so perhaps he took profits.
    26 Apr 2012, 12:02 PM Reply Like
  •  
    see I told you so.
    26 Apr 2012, 01:55 PM Reply Like
  •  
    From the article, "The Board of Directors did not review, approve or have knowledge of the specific transactions engaged in by Mr. McClendon or the terms of those transactions."
    I wonder whether the board has knowledge of anything specific that goes on in the company.
    26 Apr 2012, 02:12 PM Reply Like
  •  
    I hear they're very knowledgeable about the lobster at their favorite luncheon spot, adjourned to just after monthly board meetings.
    26 Apr 2012, 02:58 PM Reply Like
  •  
    remarkable what passes for governance at some of these places

    E
    26 Apr 2012, 02:51 PM Reply Like
  •  
    I agree with bdoeden. Although CHK has been a good short play all year- it has never violated the upper trendline on a P&F chart, the only way to protect your equity is by using stops, not hope. I can only hope that is what the long players here have done. Step back a bit and look at the longer term. Using a telescopic view, CHK looks like it just might be a real bargain. Where and when? Don't really know. I don't use fundamentals, but this is where "due-dilligence" might pay handsomely I think.
    30 Apr 2012, 10:02 PM Reply Like
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