Home » Bear Case Scenario » Chesapeake Energy Bear Case Scenario Still Lives ? CHK, $COP, $CEO, $OIL, $GAZ, $OXY,

Chesapeake Energy Bear Case Scenario Still Lives ? CHK, $COP, $CEO, $OIL, $GAZ, $OXY,

Chesapeake Energy is about to release earnings. Does the Bear Case Scenario still apply!

Chesapeake is highly levered to the price of natural gas. If they continue to rely on domestic consumption they will not overly reward the shareholders. If the product can find export markets than the stock will do well. So far its all about domestic consumption.

Management is repairing a terrible balance sheet through asset sales. If they cannot maximize asset sales look for dilutive equity issues. If the dilution is too great watch for a quasi distress sale into the rapacious arms of a cash rich oil and gas concern. Or even a knowledgeable private equity investor who will bite the bullet today and sell pretty tomorrow.

Investor nerves are  still raw. Any blip or concern will be hard to swallow; generating scrutiny and concern. Frequently called an over-reaction.

The stock is a behavioural finance case study.

George Gutowski writes from a caveat emptor perspective.

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