Icahn Wins Chesapeake Energy Board Battle
One Wall Street analyst who, like McClendon and Icahn think Chesapeake's asset value is far higher than its current share price, didn't view Icahn's stake or activist call as cause for an upgrade. "Our hold rating is a function of a nearer term outlook that significantly exposes shareholders to market & commodity risk, however the prospect for real strategic change does bear watching," wrote Deutsche Bank analyst Stephen Richardson in a late May note to clients. He estimates Chesapeake Energy's assets are worth $35 a share with oil at $95 a barrel and gas trading at $4.50.
Oil fell to its lowest price in 2012 last Friday, below $83, while natural gas is hovering around the $2.40 mark after dropping below $2 earlier this year.
See 5 ways Chesapeake Energy can be saved from itself for more on how it can initiate a share turnaround.
-- Written by Antoine Gara in New York