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What: Shares of Chesapeake Energy (NYSE: CHK ) jumped 10% today after the company stripped founder Aubrey McClendon of his chairmanship.
So what: McClendon and Chesapeake have come under fire recently over issues including McClendon's ability to buy stakes in the company’s oil and gas wells and his use of those stakes to borrow more than $1 billion to pay for his stake in some wells. He will remain CEO, according to reports.
Now what: Analysts and investors are applauding the move, but I wonder whether it goes far enough and whether this is the last we’ve heard of this. Removing McClendon from his chairmanship is like a slap on the wrist if he is going to remain CEO. The relationship is still a red flag for Chesapeake, but with a P/E ratio of 8.6 and a 2% dividend, the stock is looking attractive enough to overlook this problem, especially if he is eventually ousted as CEO.
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