Chesapeake Energy Corp (CHK)

[ctcollins]

Chesapeake's stock falls too lowest price in 25 years, as going concern weighs

Natural-gas producer may be 'too big to fail,' according to one analyst
Chesapeake Energy Corp. shares took another dive Tuesday, pushing them well below $1 to hit their lowest price in more than 25 years as the natural-gas producer's going-concern warning continued to reverberate in the equity markets and beyond.

Chesapeake Energy (CHK) stock lost 17% to end at 67 cents , its lowest close since May 9, 1994 . It traded as low as 64 cents , the lowest intraday level since February 1999 . The stock has been down for six straight sessions, losing nearly 57% during that period, its worst six-day stretch on record.

The natural-gas producer last week rang the alarm in its quarterly filing with regulators and reported a quarterly loss that was wider than Wall Street expected. (http://www.marketwatch.com/story/chesapeake-energy-stock-dives-on- heavy-volume-after-yet-another-earnings-miss-2019-11-05)

Chesapeake's most actively-traded bonds by volume on Tuesday fetched an average of 55.29 cents on the dollar, a record low, according to bond pricing and trading platform MarketAxess. Bond prices move in the opposite direction of yields, putting the same Chesapeake 8% coupon bonds due in 2027 at a yield of about 19.55%.
Chesapeake said in a press release late Tuesday that, before the start of the trading session, NGP Energy Capital Management LLC had informed Chesapeake that it was making "an in-kind pro-rata distribution" of its 310.8 million Chesapeake shares to the partners of investment funds that NGP manages.

According to FactSet, the 310.8 million shares is the largest stake held in Chesapeake at 15.9%, though it lists the owner by a slightly different name, Natural Gas Partners LLC . "Chesapeake continues to strongly believe our current capital and operating program, coupled with the planned 30% reduction in capital expenditures in 2020, will strengthen the financial position of the company for the long term," Chief Executive Doug Lawler said in the statement. After the announcement, the stock rose 7% in the extended session. "'Too big to fail' remains the prevailing view on Chesapeake," said Paul Sankey , an analyst with Mizuho.

Shares have traded below $5 for almost four years, but having language around the solvency of the company in writing perhaps "was the flashpoint," said James Mick , a portfolio manager with Tortoise Advisors