After Chesapeake Energy Corporation (“CHK”) executed a 1:200 reverse stock split on April 14, naïve retail investors obviously began pouring into the stock in droves, eventually raising the stock price by over 200% from period lows, despite the company’s obvious path towards bankruptcy.
Chesapeake Energy Stock Price Performance in April
In response, Chesapeake instituted a poison pill on April 24 to both protect $7.6 billion in tax loss carry forwards and to put these equity investors out of their misery.
Chesapeake began mailing the poison pills to equity holders, along with an updated prospectus, on Monday, as Chesapeake’s stock once again began to crater. The pill is a lethal mixture of hydroxychloroquine and Lysol and can cause death in just minutes.
A spokesperson for Chesapeake responded, “Seeing as these investors clearly have a death wish by propping up our stock, we felt it was our fiduciary duty and for the betterment of humanity to accelerate the process.”