(Reuters) - Shares of shale oil and gas producer Chesapeake Energy Corp (N:CHK), which is staring at bankruptcy, plunged about 66% in a volatile session on Tuesday that was marked by multiple trading halts.
Trading in the stock was first halted for pending news before markets opened - suggesting that the company had something major to announce.
However, it resumed trading post-midday without any announcement and triggered circuit-breakers with its steep fall.
In a dramatic day for the company on Monday, Chesapeake stock more than tripled in value, triggering 22 volatility halts before closing up 182%.
It later fell in extended trading on a Bloomberg report that the shale pioneer was preparing to file for bankruptcy and give control to lenders.
"Investors on platforms like Robinhood (are) wildly speculating on companies that have been the most impacted by the (coronavirus) pandemic that also have stock prices in the $1 dollar range," said Tyler Hardt, portfolio manager at Pelican Bay Capital Management. Pelican does not own any Chesapeake shares.
"They are blindly buying bankrupt stocks like Chesapeake, Whiting, and Hertz," Hardt said, adding that he wouldn't be surprised if "they even know these companies are in bankruptcy".
Chesapeake declined to comment on the volatility in its stock as well as the trading halt.
The company said in May it was considering a bankruptcy court restructuring of its over $9 billion debt as it was unable to access financing.
Including session moves, Chesapeake is down 10.2% this week.
Hertz Global Holding (N:HTZ) plunged 24.5%, while Whiting Petroleum (N:WLL) tumbled 28%.