Chesapeake Energy Sets Date For Reverse Stock Split, Stock Down 80% YTD

Oil and natural gas stock Chesapeake Energy (CHK) has announced that the company’s expected reverse stock split is set to occur on April 13, subject to shareholder approval.

With shares now trading at just $0.17, the reverse split is intended to increase the per share trading price to satisfy the $1 minimum bid price requirement for continued listing on the NYSE.

As a result of the reverse stock split, every 50 to 200 (as determined by the company’s board) shares of CHK’s common stock will automatically combine into one share, and the number of shares of common stock outstanding will be accordingly reduced.

If approved by shareholders, the split will become effective at 5PM April 14, 2020, with trading of the split-shares resuming under the existing trading symbol “CHK” on April 15, 2020.

Overall, analysts rate CHK a Strong Sell, according to TipRanks. In the last three months, 7 analysts have published sell ratings on the stock with only 1 analyst staying on the sidelines. Meanwhile the average analyst price target stands at $0.2 (18% upside potential). (See Chesapeake’s stock analysis on TipRanks)

Indeed, Piper Sandler analyst Kashy Harrison recently downgraded Chesapeake Energy to sell from hold with a price target of $0, down from $1.

The stock has plunged 80% year-to-date with investors anxious that the company’s hefty debt load combined with extremely low oil prices will push  CHK into bankruptcy.

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Harriet Lefton
Harriet Lefton, originally from the UK, began her career as a journalist specialising in the niche world of metal markets. She graduated from the University of Cambridge before becoming a qualified UK lawyer. Now she has turned her attention to the world of financial blogging, covering US stocks, analysts and all manner of things finance-related.

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