Friday, May 11, 2012

Boone Pickens Pulls Out!

Boone Pickens has sold his entire $13 million dollar stake in Chesapeake Energy because he is worried about the collapsing price of natural gas which has gone below $2 in the past few months.

Pickens was unhappy with the actions of Aubrey McClendon, a long time friend, who was trading natural-gas derivatives while simultaneously upholding the position as CEO of Chesapeake. Pickens also claimed that McClendon was spending more money than he was making, something he has done for years now. When this was revealed, McClendon was "stripped of his role as chairman and forced to terminate his well participation agreement early." 

What does this mean? Boone Picken's, who manages a $140 million equity fund as part of his investment firm BP Capital lost about 9% of his equity portfolio. This could also mean that future investors would become less likely to put their money into Chesapeake Energy knowing that a long time friend (and most likely confidant) of the company has pulled out. 

Can we call this a win for the movement? I would. 

Find the complete article here

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