Unbelievably, Chesapeake Energy (CHK) was one of the top performers this week.
Just yesterday, CHK exploded from $41 to a high of $73.40 on news OPEC would extend its oil production cuts on 7x daily average volume. Investors were betting that Chesapeake could push successfully push forward without its equity being wiped out.
While it was certainly an exciting run higher, the end is near – as the stock pulls back.
All as the company prepares a bankruptcy filing that could hand the company over toe senior lenders, as noted by Bloomberg.
“The dwindling options for a powerhouse that once rivaled Exxon Mobil Corp. for title of king of American natural gas comes after Chief Executive Officer Doug Lawler’s 7-year effort to untangle the financial and legal legacies of Chesapeake’s late founder, Aubrey McClendon.”
Then again, this comes as no surprise.
The company said it was a “going concern” in US SEC filings just last month, and said it was evaluating strategic alternatives including bankruptcy. Plus, it’s not as if the company could manage its $9 billion debt either.