Wednesday, August 22, 2012

Blogger Share Advice for Chesapeake Recovery

From The Motley Fool blog:
If there’s one energy company that investors love to hate its Chesapeake Energy (NYSE:CHK).  With a growing liquids business, great acreage positions in some of the most intriguing emerging energy basins and what appears to be a dirt cheap stock price, what’s not to like?  How about their image problems, bloated balance sheet and unfocused approach?  Those three have done wonders for their stock price sending it down over seventy percent from the all-time high. 
While rising natural gas prices would go a long way toward a rising stock price, it’ll take more than that to send their returns to the next level.  If they want to get back there, and one would hope that’s their goal, they need to concentrate on fixing those three keys issues.  To get them on their way, here are three reminders to help guide them on their way. 
“Image is everything” – Andre Agassi
CEO Aubrey McClendon is one of the great champions for natural gas, but at the moment he has an image problem.  Many have questioned his compensation and sweetheart deals.  Many more have questioned his over reliance on leverage both personally and professionally.  Those questions might never have been brought up if the natural gas bubble didn’t burst.  Sans financial crisis inspired margin calls as well as the demand destroyed following the crisis and McClendon could have won the greatest bet of all time. 
Read the rest of this article here.

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