Chesapeake Energy Shares Surge 8% On News To Suspend Preferred Stock Dividends

Chesapeake Energy Corp. shares surged 8% in premarket trade Friday, after the company said it is suspending its quarterly preferred stock dividends in an effort to save cash. The company said it expects to save about $170 million a year from the move. It will use those funds to buy its own debt at significant discounts. "Given the current commodity price environment for oil, natural gas and natural gas liquids, we believe that redirecting this cash toward debt retirement provides better returns for the company," the company said in a statement. "We currently have senior debt securities trading at significant discounts, and we will continue to take advantage of that within the coming year." Shares have fallen 82% in the last 12 months, while the S&P 500 is down just 9%.