Margin Call: Aubrey McClendon of Chesapeake Energy

Feb 26, 2011
J. Webster
Comments Off on Margin Call: Aubrey McClendon of Chesapeake Energy

Don’t forget this. Even CEO’s of big companies make this mistake, if you are going to buy on margin then you better have a back up plan in case a world war breaks out or the market just collapses do to some other unforeseen cause.

This was a classic margin call during the melt down of the market a few years ago. McClendon was forced to sell 94% of his Chesapeake Energy Corporation (CHK) holdings, the largest producer of natural gas in the United States, which were worth more than $2 billion at their peak:

In July of 2008, with Chesapeake trading above $60 a share, Mr. McClendon’s stake in the company was worth more than $2 billion — the vast majority of his net worth, which was reported at $2.1 billion in last year’s Forbes 400. But to meet last week’s margin call, Mr. McClendon sold his entire stake, at prices ranging from $15 to $22.

Source: NY Times

Related Posts Plugin for WordPress, Blogger...

Comments are closed.