The Insanity of Chesapeake Energy Stock
Shares of Chesapeake Energy (NYSE: CHK) have been insanely volatile this week. The oil stock tripled in value on Monday, capping an epic run of nearly 450% since the start of June. Fueling that jaw-dropping rally was a monster rebound in crude oil prices, which gave speculators some hope that the beleaguered oil company might make it through this downturn in one piece.
However, Chesapeake's stock came crashing back to earth over the past two days, losing about three-quarters of its value. The culprit: a report by Bloomberg that Chesapeake Energy is preparing to file for bankruptcy protection. That news shouldn't have come as any surprise since Chesapeake warned of that likelihood less than a month ago.
The near certainty that Chesapeake will file for bankruptcy protection, which could come any day now, suggests that the stock could have more downside ahead. Here's why.
Source Fool.com
