Why Chesapeake Energy Stock Crashed 45% on June 9
Shares of U.S. energy company Chesapeake Energy (NYSE: CHK) were cut about in half in early trading on June 9 before trading in the stock was halted. This came after material gains the day before. In fact, over the past five days the stock is up around 200% (using the last price before trading was halted). The quick downturn here is tied to a news release out of Bloomberg, but in truth it's just the reality of a bad situation finally starting to play out.
Chesapeake Energy has been struggling for some time with a heavy debt load and low energy prices. In that sense it's not dissimilar to many other companies in the oil and natural gas space, but there have been ample signs -- including a massive reverse stock split -- that Chesapeake isn't capable of muddling through the industry's rough patch this time around.
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Source Fool.com
