U.S. Markets closed

Chesapeake rallies after CEO McClendon announces retirement

Chesapeake's (CHK) stock is surging after the energy exploration company announced last night that its CEO, Aubrey McClendon, would retire on April 1. McClendon's personal financial dealings have been harshly criticized by many investors. Specifically, the CEO's personal investments in the wells that his company was drilling caused a great deal of controversy, and the SEC opened a probe into the matter last year. Chesapeake's board, however, announced that its review of McClendon's finances hadn't yet uncovered any improper conduct by him. The company's investigation is expected to conclude on February 21. In a note to investors earlier this morning, Stifel Nicolaus analyst Amir Arif responded to the company's announcement by upgrading his rating on the stock to Buy from Hold. McClendon's departure may lead to the company putting itself up for sale, or at least selling more of its assets, causing the company's value to increase, the analyst wrote. Furthermore, more investors are likely to buy Chesapeake's shares in the wake of McClendon's retirement, contends Arif, who now has a $25 price target on the shares. However, Reuters reported last night that Chesapeake’s chairman Archie Dunham said the company was not for sale in a letter to employees. In early trading, Chesapeake jumped $1.47, or 7.75%, to $20.44.