Monday, June 11, 2012

Chesapeake’s Biggest Investor Says Stock Is 70% Undervalued

The futures are at $2.228, down 3.09%.
The stock is down 1% at $18.17.
From Bloomberg:
Chesapeake Energy Corp. (CHK)’s largest investor said shares of the U.S. natural-gas producer facing a $22 billion cash-flow shortfall are 70 percent undervalued.

Southeastern Asset Management, which holds a 13.9 percent stake in Oklahoma City-based Chesapeake, said the share price implies a gas price below that of benchmark futures contracts traded on the New York Mercantile Exchange. Memphis, Tennessee- based Southeastern commented in a U.S. Securities & Exchange Commission filing today.

The stock price also doesn’t reflect any value for Chesapeake’s portfolio of unproven reserves, Southeastern said...MORE
Southeastern owns their stock at much higher prices ($28-34.02) and is actually at risk of having the loss locked in should CHK be sold.