Chesapeake Far Too Risky for Retail Investors

In the after market, the Fast Money pros took another look at Chesapeake after the beleaguered nat gas company reported earnings and revenue that missed Wall Street's expectations on Tuesday

With shares down 5% after hours, trader Guy Adami says if you’re looking to play this stock you're essentially playing a game of chance.

"You’re either going to be very right or very wrong. This stock could have a $30 handle or a $5 handle," he says.

And Adami's instinct suggests you'll be wrong.

“Aubrey McClendon stepping down as chairman could open a whole can of worms. I can’t help but wonder, is something catastrophic about to happen.”

Adami is referring to news released earlier in the day, in which the company said its chief executive, Aubrey McClendon, would relinquish his title as executive chairman at the urging of shareholders seeking to improve the oil and gas company's governance.

Last week regulators opened an informal inquiry into Chesapeake’s controversial program that granted McClendon a share in each of the natural gas producer's wells.

"People who watch CNBC's Fast Money have no business in this stock," adds trader Joe Terranova. He says there are plenty of alternatives in the space and can’t imagine why a serious nat gas investor would put money to work in Chesapeake considering all the headline risks.

“Pioneer , EOG and Noble all have solid balance sheets. Nat gas investors will go there, not Chesapeake,” says Terranova.

By the numbers, Chesapeake reported a net loss of $71 million, or 11 cents per share, compared with a net loss of $205 million, or 32 cents per share, in the same quarter a year earlier.

Analysts had expected the company to report earnings excluding items of 29 cents a share on $2.75 billion in revenue, according to a consensus estimate from Thomson Reuters.

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Trader disclosure: On May 1, 2012 , the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Keith McCullough is long GLD; Joe Terranova is long VRTS; Joe Terranova is long MCD; Joe Terranova is long JNPR; Joe Terranova is long NXPI; Joe Terranova is long JPM; Joe Terranova is long JOY; Joe Terranova is long HPQ; Joe Terranova is long LQD; Tim Seymour is long BAC; Tim Seymour is long SBUX; Tim Seymour is long FCX; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Guy Adami is long AGU; Steven Weiss is long AIG; Steven Weiss is long QCOM

For Timothy Rezvan
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Nicole Miller Regan
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CNBC.com with wires.