Aubrey McClendon, Chesapeake Energy
Spending more money than a company has a realistic shot at pulling back in isn’t a sin. It’s reckless, but investors can forgive mistakes. What makes investors angry is making the same mistake over and over again, and, rather than becoming reticent as time moves forward, doubling down each time an opportunity arises to halt the mistake cycle.
Aubrey McClendon’s mistake? Continuing to assume the price of natural gas would rise when nearly everyone else in the world recognized the severity of the supply glut. The bill he incurred stemming from his optimism has left Chesapeake Energy (NYSE:CHK) about $10 billion in debt, much of which he can only repay by selling off pieces of the company (which might end up exacerbating the problem). Even worse, it has been discovered that McClendon was running an energy hedge fund while manning the helm at Chesapeake. Care for a side of conflict of interest along with the stock’s 75% slide since 2008’s peak?
Technically speaking, McClendon is no longer the chairman thanks to all the missteps, but he’s still the CEO, with all the rights, duties and privileges thereof.