Chesapeake warned its low prices could mean removal from NYSE

Weeks after some of its trusts received delisting warnings from the New York Stock Exchange, Chespeake Energy in Oklahoma City received the same warning in the past week.

The NYSE warned the company that its trading of stock could be removed if the price of shares didn’t improve above $1. The warning came after Chesapeake stock trading for less than $1 for 30 consecutive days in October.

The Stock Exchange gave Chesapeake at least six months to improve trading prices. Chesapeake did not announce the notification but revealed it in a filing with the Securities and Exchange Commission.

“If the Common Stock ultimately were to be delisted for any reason, it could negatively impact Chesapeake as it would likely reduce the liquidity and market price of the Common Stock; reduce the number of investors willing to hold or acquire the Common Stock; and negatively impact Chesapeake’s ability to access equity markets and obtain financing,” stated the company in the filing with the SEC.

The revelation of the delisting warning came on the same day Chesapeake announced it had obtained $1.5 billion in new bank loans, an announcement that resulted in a 17 percent improvement in trading of its shares. Prices closed at 74 cents a share, up eleven cents. It was in November when Chesapeake experienced a 25-year low when shares traded for only 56 cents.

Trading started last week at 61 cents a share and closed Friday at 76 cents, up four cents from Thursday’s trading on the NYSE.

Shares dropped to 91 cents in early November after word of a weak third quarter was released by the company. Previously, shares had traded for $1.28.

 

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