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Chesapeake Energy (CHK -6.5%) is sliding on heavy volume. Reuters reports the SEC's Texas office...

Chesapeake Energy (CHK -6.5%) is sliding on heavy volume. Reuters reports the SEC's Texas office has been demanding documents from Chesapeake as part of the agency's probe into the company's deals with CEO Aubrey McClendon. Meanwhile, Baker Hughes (BHI +9.4% - previous) reports the rig count for U.S. natural gas wells has fallen to 518 thanks to weak prices. That figure is down 45% from October's high, and represents a 13-year low.
Comments (10)
  • Once they start wading through documents, other AM machinations will come to the forefront. There could be a lot more cockroaches behind the CHK facade.

     

    It will take a very strong will (and stomach) to wait out this mess which will likely drag out for years.

     

    I don't have the years, and certainly not the will, nor the stomach, to be long this mess. If, and that is a big if, the options premiums ever come in, I might look into straddle.
    20 Jul 2012, 02:39 PM Reply Like
  • Wise move.
    20 Jul 2012, 03:06 PM Reply Like
  • tempting to sell some puts here, but the unknown still lurks...
    20 Jul 2012, 03:37 PM Reply Like
  • I agree with you, but the funding gap is still HUGE and who knows what they end up uncovering? I think this is a no touch until there's a lot more clarity or until McClendon gets the boot.
    20 Jul 2012, 06:24 PM Reply Like
  • Buy when the market is fearful; Sell when the market is greedy.
    As a long term play CHK is an outright bargain. In time Aubrey's mess will be passe and NatGas prices will be once again well above $5.00 . I am long CHK and have added to position today.
    20 Jul 2012, 03:47 PM Reply Like
  • When the information on what has really gone on at CHK comes out, there will be a take over and McClendon will be gone.
    20 Jul 2012, 04:28 PM Reply Like
  • i hope there is a solution here. i'm in at 19, and sold the august $19 put. bought them back today when the stock fell (i often do that when i have a volatile stock). we could see mcclendon in a lot of personal trouble. he's a cowboy!
    20 Jul 2012, 06:08 PM Reply Like
  • Natural Gas price is the only thing that really matter. All the rest is just
    noise. Aubaery and short sellers don't matter. CHK will be cash cow as price marches towards $5.00. I would think CHK will be soon $24 since gas price $3.08 is already 30% more compare to last quarter.
    CHK is 80% gas and 20% LNG and oil.
    21 Jul 2012, 12:44 AM Reply Like
  • in the very short run, the most important thing is investor confidence in management. it won't be restored until mcclendon is gone. the upcoming scandal is going to hurt prices when it hits the light of day.

     

    could be something so massive chk ends up taking a deep dive. lots of smart investors won't touch this company. it could be the target of a takeover if things get bad enough.
    21 Jul 2012, 08:21 AM Reply Like
  • My guess is the run down in price on Thursday and Friday has a lot to do with options expiration. I think it's pretty difficult to accurately attribute price reduction to news on expiration day. Let's wait for next week and see if CHK isn't selling in the 18-19 range.

     

    With wells down to an all time low, a 2% dividend, greater acceptance of gas in a variety of applications and a low P/E the stock starts to look attractive here. If there was something legally wrong with the McLedon dealing I believe Ichan would have removed him. Sure CHK is a bit messy, but so is making an omlette.
    22 Jul 2012, 12:37 PM Reply Like
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