Chesapeake Energy plunges below $1 as survival in question

• Chesapeake Energy (CHK -30.9%) collapses to 20-year lows, a day after it issued a going concern notice and warned it may not be able to outlast low fuel prices.
• "While we don't expect this move to come as a surprise given balance sheet issues, the going concern warning in the most recent 10-Q highlighted a declining leverage covenant that may be [to] difficult overcome in our view," Tudor Pickering Holt says in downgrading CHK shares to Sell from Hold.
• CHK's Haynesville shale asset is the most likely candidate for a sale, but "production (and value) is declining by the day as the asset has entered base decline," says Tudor analyst Sameer Panjwani.
• Bernstein also is bearish on survival prospects, as analyst Bob Brackett says CHK could look to tap its revolver or engage in more debt-for-equity transactions, but "neither of these options give us comfort," analyst Bob Brackett says in cutting his price target to $0.50 from $1.25 and reiterating an Underperform rating.