CEO Exit Smacks of Irony: Cramer
"Somewhere the irony gods are having a real belly laugh," said Jim Cramer. "They are sitting back and cackling."
Of course, the Mad Money host was being a little dramatic but he truly finds recent developments in the energy sector somewhat perverse if not downright satirical.
In a surprise announcement after the markets closed Tuesday, Chesapeake Energy announced the departure of CEO Aubrey McClendon, the flamboyant entrepreneur who helped found the natural gas and oil company twenty-four years ago.
"And on the same day Kinder Morgan snapped up Copano Energy," Cramer explained
What is it that Cramer finds almost comical?
"Aubrey McClendon built Chesapeake on the notion that rising demand, and therefore rising prices of natural gas would make the company he co-founded into the greatest independent oil and gas company on earth."
Unfortunately nat gas prices didn't cooperate. Prices languished and instead of achieving greatness, Chesapeake became over-extended.
"However, with its acquisition, Kinder is saying that the revolution that Aubrey bet his company on is now upon us. Aubrey just didn't get there in time," Cramer remarked.
"You can't blame the Chesapeake board for its actions with Aubrey," Cramer added.
The beleaguered CEO had landed squarely in the center of controversy. Under his leadership, Chesapeake fell under scrutiny for blurring the line between McClendon's personal dealings and that of the company.
The findings of the board's probe will be released next month, but so far nothing improper has been disclosed.
Nonetheless, big shareholders took control of the board in June and McClendon was stripped last year of his title as chairman.
Because of that and other issues, investors began to assign the stock a so-called 'Aubrey discount.' That is, Wall Street was reluctant to give the stock a higher multiple because of potential overhang.
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"McClendon is saying he retired but other sources are saying that he was forced out, a victim of the wildcatting ways that have always been his hallmark," Cramer said.
But why he left, probably isn't that important. The bottom line is that McClendon is stepping down.
"I doubt we've seen the last of Aubrey," said Cramer. "I suspect he will be back in action soon with another vehicle."
However, Cramer added the irony is almost palpable. "Kinder's gotten to the promised land that Aubrey dreamed of."
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