Shorts will cover above $10 tomorrow.
Analysts are clearly focusing on understanding how management is squeezing efficiencies and that will likely be what they are all looking at.
Time and time again they are saying CHK is simply not in distress, way too many valuable assets that can be sold if the company needs to.
That's a welcome relief. This is probably the last walk down. CHK will be back in double digits right after earnings and the conference call. Management has to play the cost cutting game reducing capex substantially and Wall Street will cheer.
I have been saying this for a while but the market does not seem to believe this argument. The stock was near $70 before the issue, you would think it would have started working its way back to at least $35 for these reasons pending their findings.
This week will end very well for CHK.
APC just had an earnings surprise, came out with surprising drilling and operating efficiencies. Stock went up $10 from a low to 69 to almost 78 today.
Given how beat CHK is, any earnings beat should send the stock flying, maybe back to the teens where it belongs.
Most likely with the next six months being somewhat of a bore, with no major shocks left, Chesapeake will likely keep heading up as the panic subsides.
Around now is when shorts might start going long. This should jump start the share price recovery.
All these fake trading battles over $9 or $10 are not fooling anybody here.
Traders pretty much know that those who needed to sell this have already sold and are likely just buying time here, which can work for a short while as it seems to be but sooner or later the group has to bite the bullet and start putting the buys in.
Sentiment: Strong Buy
Sector is just massively oversold. Natgas is going to go up to the 4s again and take SWN and CHK back to 30/20 respectively. Before that if someone can buy either of these companies they will do very well at these prices.
CHK is so badly hit by fear and funds having to sell with div cancelled that the only way it goes from here on is up, up and up. Covering alone will bring this back to $13 soon.
Sentiment: Strong Buy
Reasoning is as follows. Air quality testing does not take a lot of time, this is not a very complicated thing to do as we know from the fact that others have managed to do testing and get readings in short time.
The investigation started FOUR months ago. If the results are bad this is a health hazard to people and CPSC should come out and say so to prevent more health risks. So far nothing.
Ergo there appears to be a greater chance that the tests do not reveal crazy numbers. Could be wrong but that's how i see this. As the days go by this becomes more and more of a speculative buy given the stock was in the $70s before all this broke out.
4 months over since Consumer Products Safety Commission started their investigation.
You would think by now they can get air quality readings which others have been getting in days.
But this seems more like protecting their profits than anything else.
They can pay big if indeed someone uses this opportunity to take Chesapeake private or make an outright offer.
That's all I see now on this board and about Chesapeake.
As a 10% holder, Icahn has seen everything that was announced and has more information about the assets and plans than anyone who has written about this today in the papers or seekingalpha.
If he sees this going down he will either push for a sale or will sell himself. When there is a filing from him selling then it's time to panic and throw in the towel. I haven't seen one yet.
At times like this when the market values the company far less than what the insiders believe, they should put the company at pla and listen to buyouts with an open mind.
That process alone will help set the fair value of the assets. I hope Lawler is doing this with Chesapeake.
Cutting dividend makes this even more attractive to PE. The market is not even assuming that this can happen.
PE can come in with 10 Billion here to take CHK out. In 5 years with decent commodity prices they can make 10-20 Billion on this.
No risk no gain. Shorts are assuming they will not do this since CHK is not the typical proflle of firms that PE goes for.
But when you hear the CEO explicitly reference high quality assets even in the PR you have to think he is trying to flaunt his assets, maybe for some reason here.
The stock already took a hit two weeks back when the bond payout was announced.
The difference yesterday was just 59 million. Stock is losing almost 300 million in cap for this.
Looks like the trend is starting to change. Will battle 12.0 tomorrow,hopefully successfully and then we have a more even battle between the shorts and the longs once this goes back to the 13-14 range.
Showing signs of a very strong breakout looming. Since 3pm yesterday there seems to be slow but u relentless buying. Today's data mattered zilch. Think 13 or higher on the horizon here