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The stock fell more than 14 percent, or $1.70 to $10.14 on the New York Stock Exchange in morning trade, a level not seen since at least 2003.
"I think the stock is undervalued, but my big concern is the stock could easily go to $2 a share on fear and panic," Phil Weiss, energy analyst at Argus Research, said. "The market is fearful that they may be issuing new shares, and they may have liquidity issues."
The company's credit default swaps were also trading at levels that showed mounting worries about the Oklahoma City, Oklahoma, company's ability to meet debt payments.
A company spokesman was not immediately available to comment, but Chesapeake Chief Executive Officer Aubrey McClendon told the Oklahoman newspaper on Thursday that the company will make its interest payments.
"Our company is in excellent position to weather the current difficult economic situation in the U.S.," the executive told the newspaper.
Last week, Chesapeake filed an acquisition shelf registration that would allow it to issue as many as 50 million shares to pay for assets, businesses or securities of other companies.
That filing raised worry that the company, which has labored under a heavy debt burden, was in need of cash and will underperform its peers due to share dilution. Since the announcement, the shares have tumbled about 40 percent.
(Reporting by Anna Driver in Houston, editing by Matthew Lewis) Keywords: CHESAPEAKE STOCKS/
(anna.driver@thomsonreuters.com; + 1 713 210 8509; Reuters Messaging: anna.driver.reuters.com@reuters.net)
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