Why Chesapeake Energy, Diamondback Energy, and Red Robin Gourmet Burgers Slumped Today
Wednesday looked like a calm day on Wall Street, as indexes didn't end the session with particularly large moves from where they began. Yet even though major market averages didn't see big changes, there was plenty of activity at the individual stock level, especially because of the ongoing progress of earnings season. Some stocks saw significant losses due to adverse news. Chesapeake Energy (NYSE: CHK), Diamondback Energy (NASDAQ: FANG), and Red Robin Gourmet Burgers (NASDAQ: RRGB) were among the worst performers. Here's why they did so poorly.
Shares of Chesapeake Energy plunged 29%, falling below $1 as investors continued to weigh the implications of its most recent earnings report. The energy stock drop 18% Tuesday after posting wider losses than expected and seeing production output fall. In response, Chesapeake said it would have to cut back on spending, and the addition of language questioning whether the company can continue as a going concern suggested that the energy player might be nearing the end of its rope. If conditions in the industry don't improve soon, then Chesapeake might find itself having to do a reverse split or even delisting entirely from the stock exchange.
Image source: Chesapeake Energy.
Source Fool.com
