It was a wild ride for Chesapeake Energy Corp. shareholders today following a morning report by Reuters that delved into $1.1 billion in personal loans taken out by founder and CEO Aubrey McClendon against his interests in a founder well participation program.
After being down as much as 10 percent in morning trading, Chesapeake shares recovered in the afternoon to close at $18.06, still down more than 5 percent. Trading volume was extremely heavy, though, with more than 93 million shares changing hands. Chesapeake usually has average trading volume of 16 million shares. When the dust settled, investors shaved about $640 million off the value of Chesapeake shares.
By mid-afternoon, Chesapeake posted a full response on its website. Around the blogosphere, reaction also was swift:
Here’s just a sampling:
- Simon Lack, Seeking Alpha: Chesapeake’s CEO Once Again Shows Poor Judgment
- Davy Bui, Seeking Alpha: Investors Overreact to Chesapeake CEO loan scandal
- Francine McKenna, Forbes: Chesapeake Energy: CEO McClendon Serves Himself First
- Evan Niu, The Motley Fool: Why Chesapeake Energy Sank
- Heard on the Street, The Wall Street Journal: Chesapeake Fuels Reputation for Risk
- Jeff Macke, Yahoo! Breakout: Chesapeake Energy Plunges on CEO Debt
- Bezinga.com, MarketWatch: Chesapeake’s McClendon is Back Borrowing Money
Meanwhile, two other publicly traded Chesapeake entities also suffered on Wednesday. Subsidiary Chesapeake Midstream Partners was down 4.6 percent, closing at $27.96 a unit, while Chesapeake Granite Wash Trust dipped 5 percent to $23.71 a unit.