In a filing made with the SEC on Tuesday it was revealed that Carl Icahn is not holding a stake in Chesapeake Energy Corporation (NYSE:CHK) as of the end of the first quarter. The news comes alongside several other changes to the fund manager’s portfolio made in the period leading up to March 31st.
Icahn has beeen rumored to be just about to announce a stake in the oil and gas exploration company for a couple of days now. No announcement has been heard though the firm’s stock has been up on the news that the investor has gotten on board. A Wall Street Journal Article quoted the company’s CEO, Aubrey McClendon, welcoming Icahn back to the family and speculating that he will make a lot of money with them.
The latest Robinhood Investors Conference is in the books, and some hedge funds made an appearance at the conference. In a panel on hedge funds moderated by Maverick Capital's Lee Ainslie, Ricky Sandler of Eminence Capital, Gaurav Kapadia of XN and Glen Kacher of Light Street discussed their own hedge funds and various aspects of Read More
Icahn had no stake in the company as of March 31st according to his 13-F filing. That was filed on the day of the deadline, 45 days after the close of the third quarter. There has been a great deal of time since then for the investor to have picked up the stock but the promised announcement has still not come. That must be making some of the firm’s more recent buyers a little itchy.
Chesapeake has been introuble for some time now. The company is spending a lot of capital and making very little money. It is up to the hilt in special deals like its Glenn Pool offering and other invested money. The company has been pulling in more from investors than from selling its products. Its beating tech stocks at their own game and the wheel has to stop turning some time.
The bottom in gas prices is severely hurting the company and its new pipeline operations won’t alleviate that pressure. The company needs to quickly get into an export market in order to start pulling in revenue. Why Icahn wants to get in on the action it is difficult to know but that is essence preceding existence. We still don’t know if he has bought a stake or if that was some kind of erroneous communication.
Icahn may very well announce later today or early tomorrow that he has a stake in the firm. Until he does many will be waiting with baited breadth. Those who bought assuming the rumors were true will not appreciate the fallout if they feel they’ve been misled.