Memorial Day 2012

Fort Snelling National Cemetary

"...that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion--that we here highly resolve that these dead shall not have died in vain, that this nation under God shall have a new birth of freedom, and that government of the people, by the people, for the people shall not perish from the earth." 

-Abraham Lincoln

at Gettysburg,  November 19, 1863

Carl Icahn Files a Bunch of 13D's, Owns 7.56% of Chesapeake Energy, Would Like the Board to Leave (CHK)

Fa!
And Ha again!
Following up on May 14ths "Dear Chesapeake Energy, My Name is Carl Icahn... (CHK)" we have Deal Journal:
Dear Chesapeake: I’m Back. Love, Carl Icahn

Chesapeake Energy CEO Aubrey McClendon said a few weeks ago that Carl Icahn made a lot of money during his time as a Chesapeake shareholder in 2010 and even called to say “thanks” when he cashed out.  Icahn’s version is less sanguine.

In a scathing letter announcing he has acquired a 7.5% stake in Chesapeake, Icahn says he cashed out last time around because the company abandoned promises of frugality in favor of a buying spree.

“Recognizing this fundamental problem with the board, we sold our position,” Icahn wrote. “That decision turned out to be particularly prescient.”...MORE

In yesterday's "Icahn, BlackRock Bullish on Chesapeake; Shares Rise" (CHK) we ended with:

...As of a couple minutes ago Mr. Icahn has not crossed the filing threshold . Maybe it's planned for Friday evening ahead of the long weekend.

Here are the 13D's, accepted at the IRS  2012-05-25 15:56:59

At Friday's close the stock was at $15.81, up 1.48% and got to $16.10 in afterhours actio9n.
The trades covered by the filings:

(c) The following table sets forth all transactions with respect to Shares effected during the past sixty (60) days by any of the Reporting Persons, inclusive of any transactions effected through 4:00 p.m., New York City time, on May 25, 2012. Except as otherwise noted below, all such transactions were purchases of Shares effected in the open market, and the table includes commissions paid in per share prices.

Name of Reporting Person	Date of Transaction	Amount of Securities	Price Per Share
High River LP	4/19/2012	200,000	18.03
High River LP	4/23/2012	567,498	17.64
High River LP	4/24/2012	232,502	17.90
High River LP	4/27/2012	252,556	17.56
High River LP	4/30/2012	157,366	17.68
High River LP	5/7/2012	9,216	16.75
High River LP	5/8/2012	117,480	16.73
High River LP	5/16/2012	1,720,000	14.60
High River LP	5/2/2012	1,781,775	17.22
High River LP	5/3/2012	503,326	17.10
High River LP	5/4/2012	289,802	17.37
High River LP	5/15/2012	600,000	14.60
High River LP	5/17/2012	180,000	13.60
High River LP	05/18/2012	1,126,879	14.12
High River LP	05/21/2012	404,063	14.67
High River LP	05/22/2012	183,790	14.74
High River LP	05/23/2012	1,054,729	14.53
High River LP	05/24/2012	636,060	14.82
Icahn Partners LP	4/19/2012	311,317	18.03
Icahn Partners LP	4/23/2012	883,358	17.64
Icahn Partners LP	4/24/2012	361,908	17.90
Icahn Partners LP	4/27/2012	393,124	17.56
Icahn Partners LP	4/30/2012	244,953	17.68
Icahn Partners LP	5/7/2012	13,610	16.75
Icahn Partners LP	5/8/2012	173,490	16.73
Icahn Partners LP	5/16/2012	2,540,018	14.60
Icahn Partners LP	5/2/2012	2,518,695	17.22
Icahn Partners LP	5/3/2012	743,289	17.10
Icahn Partners LP	5/4/2012	427,963	17.37
Icahn Partners LP	5/15/2012	886,054	14.60
Icahn Partners LP	5/17/2012	265,816	13.60
Icahn Partners LP	05/18/2012	1,664,125	14.12
Icahn Partners LP	05/21/2012	596,703	14.67
Icahn Partners LP	05/22/2012	271,412	14.74
Icahn Partners LP	05/23/2012	1,557,577	14.53
Icahn Partners LP	05/24/2012	939,305	14.82
Icahn Partners Master Fund LP	4/19/2012	325,759	18.03
Icahn Partners Master Fund LP	4/23/2012	924,337	17.64
Icahn Partners Master Fund LP	4/24/2012	378,698	17.90
Icahn Partners Master Fund LP	4/27/2012	411,361	17.56
Icahn Partners Master Fund LP	4/30/2012	256,316	17.68
Icahn Partners Master Fund LP	5/7/2012	14,407	16.75
Icahn Partners Master Fund LP	5/8/2012	183,671	16.73
Icahn Partners Master Fund LP	5/16/2012	2,689,083	14.60
Icahn Partners Master Fund LP	5/2/2012	2,693,489	17.22
Icahn Partners Master Fund LP	5/3/2012	786,910	17.10
Icahn Partners Master Fund LP	5/4/2012	453,082	17.37
Icahn Partners Master Fund LP	5/15/2012	938,053	14.60
Icahn Partners Master Fund LP	5/17/2012	281,415	13.60
Icahn Partners Master Fund LP	05/18/2012	1,761,785	14.12
Icahn Partners Master Fund LP	05/21/2012	631,720	14.67
Icahn Partners Master Fund LP	05/22/2012	287,340	14.74
Icahn Partners Master Fund LP	05/23/2012	1,648,984	14.53
Icahn Partners Master Fund LP	05/24/2012	994,430	14.82
Icahn Partners Master Fund II L.P.	4/19/2012	113,036	18.03
Icahn Partners Master Fund II L.P.	4/23/2012	320,738	17.64
Icahn Partners Master Fund II L.P.	4/24/2012	131,405	17.90
Icahn Partners Master Fund II L.P.	4/27/2012	142,739	17.56
Icahn Partners Master Fund II L.P.	4/30/2012	88,938	17.68
Icahn Partners Master Fund II L.P.	5/7/2012	6,136	16.75
Icahn Partners Master Fund II L.P.	5/8/2012	78,234	16.73
Icahn Partners Master Fund II L.P.	5/16/2012	1,145,384	14.60
Icahn Partners Master Fund II L.P.	5/2/2012	1,328,560	17.22
Icahn Partners Master Fund II L.P.	5/3/2012	335,174	17.10
Icahn Partners Master Fund II L.P.	5/4/2012	192,986	17.37
Icahn Partners Master Fund II L.P.	5/15/2012	399,551	14.60
Icahn Partners Master Fund II L.P.	5/17/2012	119,866	13.60
Icahn Partners Master Fund II L.P.	05/18/2012	750,413	14.12
Icahn Partners Master Fund II L.P.	05/21/2012	269,072	14.67
Icahn Partners Master Fund II L.P.	05/22/2012	122,390	14.74
Icahn Partners Master Fund II L.P.	05/24/2012	423,564	14.82
Icahn Partners Master Fund III L.P.	4/19/2012	49,888	18.03
Icahn Partners Master Fund III L.P.	4/23/2012	141,560	17.64
Icahn Partners Master Fund III L.P.	4/24/2012	57,996	17.90
Icahn Partners Master Fund III L.P.	4/27/2012	62,998	17.56
Icahn Partners Master Fund III L.P.	4/30/2012	39,255	17.68
Icahn Partners Master Fund III L.P.	5/7/2012	2,709	16.75
Icahn Partners Master Fund III L.P.	5/8/2012	34,527	16.73
Icahn Partners Master Fund III L.P.	5/16/2012	505,515	14.60
Icahn Partners Master Fund III L.P.	5/2/2012	586,356	17.22
Icahn Partners Master Fund III L.P.	5/3/2012	147,929	17.10
Icahn Partners Master Fund III L.P.	5/4/2012	85,175	17.37
Icahn Partners Master Fund III L.P.	5/15/2012	176,342	14.60
Icahn Partners Master Fund III L.P.	5/17/2012	52,903	13.60
Icahn Partners Master Fund III L.P.	05/18/2012	331,194	14.12
Icahn Partners Master Fund III L.P.	05/21/2012	118,757	14.67
Icahn Partners Master Fund III L.P.	05/22/2012	54,018	14.74
Icahn Partners Master Fund III L.P.	05/23/2012	309,988	14.53
Icahn Partners Master Fund III L.P.	05/24/2012	186,940	14.82

Natural Gas Rig Count FALLS by 6 to 594

The front futures are down 10.3 cents at $2.544 and down 20.5 cents since we posted Natural Gas Rig Count UP in Latest Week and "It's Time to Short Natural Gas Again" last Friday:

The front futures are up 15.5 cents at $2.749.

From Reuters Africa:

The number of rigs drilling for natural gas in the United States fell by six to 594 this week, data from oil services firm Baker Hughes showed on Friday.


The number of oil drilling rigs rose by one in the latest week to a new 25-year high of 1,383, the report showed.

Horizontal rigs, the type most often used to extract oil or gas from shale, fell by two to 1,191.

More to come.

"Facebook’s stock should trade for $13.80" (FB)

Alrighty then.
So far we've got a $29, a $22, a $7.50 and now this, from MarketWatch:
Commentary: Here’s a fair-price calculation for Facebook

Well, then, what should be the price of Facebook’s stock?  

Rather than endlessly rehashing the events that have taken place over the past week, it is this question that investors should be asking. Surprisingly, however, few are doing so.

And yet, courtesy of a just-released study, calculating a fair price for Facebook’s stock isn’t as difficult as it might otherwise seem. 

The study is entitled “Post-IPO Employment and Revenue Growth for U.S. IPOs, June 1996–2010.” Its authors are Jay Ritter, a finance professor at the University of Florida, and two researchers at the University of California, Davis: Martin Kenney, a professor in the Department of Human and Community Development, and Donald Patton, a research associate in that same department. ( Click here to read a copy of their study. ) 

The researchers found that the revenue of the average company going public in the period analyzed in the study grew by 212% over the five years after its IPO (excluding spinoffs and buyouts). Assuming Facebook’s revenue grows just as fast, and given that the company’s latest-year revenue was $3.71 billion, its annual revenue in five years’ time will be $11.58 billion. 

Since Facebook FB -3.42%   is most often compared to Google GOOG -2.14%  , let’s assume that its price-to-sales ratio in five years will be just as high as Google’s is currently: 5.51-to-1. You could argue that this is an overly generous assumption, of course. But it nevertheless means Facebook’s market cap in five years will be just $63.8 billion — 30% less than where it stands today. 

Assuming that the total number of its shares stays constant, that works out to a price per share of just $23.26 — in contrast to its recent closing price of $33.03. 

Ouch.

Actually, however, the news is even worse: No one is going to invest in Facebook shares today if its price will be 30% lower in five years. So, in order to entice someone to invest in it today, Facebook needs to offer a handsome return. Assuming that its five-year return is equal to the stock market’s long-term average return of 11% annualized, Facebook shares currently would need to be trading at just $13.80. 

Double ouch....MORE