Dear Mr. Icahn:
A few years back, I had the opportunity to meet you at an investor conference in New York. You specifically told me never to ask you for money, but if I had a good idea to call. It was quite a few years ago, and I sincerely doubt you would remember me besides. So, I thought the easiest, most resourceful way to get word to you was to post an open letter on a widely read investor site like Seeking Alpha. That said, I have an idea for you in a name you know extremely well - Chesapeake Energy.
Like you, I've been invested in Chesapeake for some years. It is been a frustrating investment for sure, down more than 50% in the past six months. While I think CEO Doug Lawler and his team have done an excellent job under the circumstances; the stock has been a disaster. The Company is not buying their stock back at these depressed levels, and they are in no position to raise the dividend. Truthfully, I believe that management is more concerned with appeasing Wall Street analysts than trusting their good business judgment. Moreover, the stock does not trade on CHK's company fundamentals; it is more or less a liquid proxy for natural gas, both long and short, which has not helped Chesapeake's situation. That said, the biggest problem with Chesapeake's stock is there is little urgency to invest, and no foreseeable catalyst. The stock needs a real push - something that will create urgency and get both financial and strategic buyers interested again. Frankly, I think the most efficient way to create value in CHK's situation is to break the company up into smaller, more manageable pieces. As investors, we got a little taste of this potential when CHK sold their Southern Marcellus assets for an enormous valuation in December.
That brings me to the point of my letter - have you considered making a bid for Chesapeake?Read more by clicking here.
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