Chesapeake Energy’s CEO Wiped Out By Margin Call

Over the past few years Chesapeake Energy's (CHK-NYSE) CEO Aubrey McClendon has been buying stock seemingly every month; press releases announcing his purchases crossed the tape constantly. Aubrey seemed to have unshakable belief in his company, and I had long thought he would sell it to a larger integrated oil and gas producer.

The frenzy of buying earlier this year over their prospects in the Haynesville Shale made Aubrey's stake in the company worth roughly $2 billion, but it has been a disaster since the fourth of July for Aubrey, and now he is nothing more than a salaryman:

Chesapeake Energy Corporation (NYSE:CHK - News) today disclosed that its Chief Executive Officer, Aubrey K. McClendon, involuntarily sold substantially all of his shares of Chesapeake common stock over the past three days in order to meet margin loan calls.

Mr. McClendon commented, “I am very disappointed to have been required to sell substantially all of my shares of Chesapeake. These involuntary and unexpected sales were precipitated by the extraordinary circumstances of the worldwide financial crisis. In no way do these sales reflect my view of the company’s financial position or my view of Chesapeake’s future performance potential. I have been the company’s largest individual shareholder for the past three years and frequently purchased additional shares of stock on margin as an expression of my complete confidence in the value of the company’s strategy and assets.” Business Wire

Aubrey’s’ Big Adventure-One Year Chart
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My confidence in Chesapeake remains undiminished, and I look forward to rebuilding my ownership position in the company in the months and years ahead.

Counterparty risk, due to hedging contracts with Morgan Stanley and a leveraged balance sheet remain a concern for investors, but the stock is bouncing a bit in afterhours trading.

If you think you had a bad week, well, it could have been worse.
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No Guts No Glory..Aubrey will be back.
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Chesapeake Energy Corporation Discloses CEO’s Involuntary Sale of Common Stock
Business Wire

Chesapeake Falls Amid Concern Over Hedging Contracts
Bloomberg
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