What Is Going On With These Falling Stocks?

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The natural gas sector continues to bleed as Chesapeake Energy Corporation (NYSE:CHK) and Southwestern Energy Company (NYSE:SWN) have lost another 7% and 10% today on the back of declining natural gas prices. The price of the near-month natural gas contract breached the $2 per thousand cubic feet level for the first time this year. Earlier in the week, legendary natural gas traded John Arnold tweeted:

“With few hedges for ’16, half of US energy industry will be bankrupt in 6 months with prices at these levels. OPEC definitely smells blood.”

John Arnold averaged triple digit returns in the 2000’s when he ran Centaurus Advisors before hanging it all up several years ago to focus on philanthropy. Plenty of smart money fund managers still believe in Chesapeake Energy Corporation (NYSE:CHK), however, as Carl Icahn’s Icahn Capital LP reported owning a stake of 73.05 million shares in the company at the end of September. In addition, the number of elite funds long Southwestern Energy Company (NYSE:SWN) increased by 5 to 38 during the third quarter. Those funds collectively own around 11.7% of Southwestern Energy’s float.

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Disclosure: None

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