What if you bought Chesapeake Energy in 2000?
US Industry · Gas. The hindsight answer, year by year, against the only benchmark that matters.
Could you have picked it? Play0× · S&P 500 same money: $4,626
Every dollar is gone. Chesapeake Energy went bankrupt in 2020, so $1,000 invested in any of these years is worth exactly nothing today.
The story
Chesapeake Energy was co-founded in 1989 by Aubrey McClendon, who became the face of the US shale gas revolution. His strategy was to grab drilling rights across vast acreage before rivals understood horizontal drilling and fracking. Gas prices rose through the mid-2000s and Chesapeake's shares rose with them, peaking in 2008.
The model relied on debt and on continually raising money. In late 2008 McClendon was forced to sell almost all his shares in margin calls, and the board then awarded him a large bonus. Ironically, Chesapeake's success helped flood the market with gas, collapsing prices. McClendon was ousted in 2013 after controversy over personal loans tied to his stake in company wells; in 2016 he was indicted on bid-rigging charges and died in a car crash the next day. With heavy debt and low gas prices, Chesapeake filed for bankruptcy in June 2020. It emerged with new shares, later becoming Expand Energy, but the old shareholders were wiped out.
The lesson: Producers who succeed too well can destroy their own prices; in commodities, a supply boom often benefits customers far more than the pioneers.
$1,000 invested at the start of each year
| Bought in | Price then | Worth today | S&P 500 would be | Multiple |
|---|---|---|---|---|
| 2000 | $2.50 | $0 | $4,626 | — |
| 2003 | $7.70 | $0 | $7,727 | — |
| 2005 | $16.50 | $0 | $5,763 | — |
| 2007 | $29.00 | $0 | $4,789 | — |
| 2008 | $39.00 | $0 | $4,626 | — |
| 2010 | $26.00 | $0 | $6,071 | — |
| 2012 | $22.00 | $0 | $5,312 | — |
| 2015 | $19.00 | $0 | $3,301 | — |
| 2018 | $4.00 | $0 | $2,519 | — |
| 2020 | $0.8 | $0 | $2,092 | — |
green = beat the S&P 500 · red = lost money
There was no good entry point: every starting year ends at zero. The same $1,000 in the S&P 500 from 2000 would be $4,626 today.
On this day
Now try it without hindsight. The wheel decides the year and the asset class, you pick the position, ten seconds a pick, and we simulate to today. Chesapeake Energy is one of 258 positions on the wheel — including the ones that went to zero.
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