Of all the companies that have been hammered by the Oil Crisis, few have been hit as hard as Chesapeake Energy Corporation. CHK’s stock market valuation today is about $1 billion versus more than $20 billion a year ago. The stock today trades at less than $2 a share after having reported EPS losses over the last year of more than $18 per share. In short, it has been a really rough ride for CHK and its shareholders.
To the extent that the stock market is behaving rationally, investors clearly are pricing in a very real risk that Chesapeake may have to enter bankruptcy in the future. No one knows if that will happen of course, and it is certainly worth noting that Chesapeake has a cogent plan to pay off its $500 million in maturing debt that comes due in March.