Chesapeake Energy Corp (CHK)

[ogbull]

The article is doublespeak and makes no sense whatsoever.

First, just because CHK is now able to issue a lot more shares does not mean that the shares will be issued. This is like an emergency parachute and creates the means in which the company can swap shares for debt.

They will not run out tomorrow and swap the shares for debt if the dept is not due. This is an umbrella -- a guarantee that the company is not going bankrupt.

Those that don't understand are dumping out to the shorts that do understand.

The real buyers are setting back waiting to see when the selling pressure ends, and then they will start accumulating shares.

If this was a strong sell off, volume would be over 20 million shares by now.

The market needs to digest what has just happen and realize that this move guarantees no bankruptcy --- shares are not being sold. We are not being diluted.

Even if they do sell a few millions shares to settle dept, there is nothing stopping them for buying back the shares when the crisis has passed.

Here's another point: The is no immediate need to trades shares for dept so why not wait until the share value increases and then trade shares.

This move also guarantees that creditors will get paid. For example, Williams pipeline does not need to worry anymore about the liquidity of Chesapeake.

This agreement to issue more stock is like grease to their money making machine.

Investors will figure it out soon.