Big investors are currently increasing their stakes in the company. Certainly, they see some value in stock at current prices. Carl Icahn increased his stake in the company to 9% from 7.5%.
The main reason behind the recent slump in stock price was the fears about the debt and delay in asset sales. A delay in asset sales was expected due to the market conditions.
However, it will not be long before the company sells its assets earmarked for sale and bring down its debt. The fall in price gave a great opportunity to these big boys to increase their stakes in the company.
arl Icahn has now spent $951 million building his stake in the company, and he remains the second largest shareholder.
Further, hedge funds are also loading up on Chesapeake stocks. Mohnish Pabrai, a hedge fund manager, recently increased Chesapeake stocks in his portfolio.
At the moment, about 20% of the total value of his fund is invested in Chesapeake, behind only Bank of America (BAC) and Citi Group (C).
I agree with these big boys, and believe that the fall in Chesapeake share price in temporary and it will recover in the medium and long-term.
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