Gassed up
A new energy behemoth is born
Good morning, methane mavericks. This is your Stock Market Rundown for January 22nd, 2024. Thanks for tuning in for another week of shareholder shenanigans. Let’s get started:
TODAY’S TOP STORY: GASEOUS EMISSIONS
With headlines blaring about “net zero” emissions goals, you might think fossil fuel production is an industry in decline in the US. But when it comes to natural gas, the opposite is true. In 2023, the US became the world’s largest exporter of liquefied natural gas. Take that, Qatar!
The world is thirsty for those sweet, sweet hydrocarbon molecules, and American producers are ready to serve ‘em up. In a mega-deal announced earlier this month, Chesapeake Energy agreed to merge with smaller rival Southwestern Energy. The $24 billion union will form the biggest pure-play US natural gas producer.
Chesapeake has a checkered history, and a storied founder: Aubrey McClendon, whom Forbes once dubbed “America’s most reckless billionaire.” McClendon started his career as an accountant, but became a wildcatter when he realized there was a lot more money in well-drilling than in bean-counting.
He and his partners pioneered innovative techniques like hydraulic fracturing—coaxing shale gas out of previously-unproductive rock formations. Via debt-fuelled expansion, McClendon became a figurehead of the energy industry, and—at one point—the highest-paid CEO in the S&P 500.
But eventually, the reckless billionaire’s aggressive tactics caught up to him. In 2016, McClendon was indicted on federal charges of rigging bids to buy oil and gas leases. He died the next day in a single-vehicle crash.
With Chesapeake and Southwestern now merging, the successor entity will pick a new name, so the moniker “Chesapeake” will be consigned to the history books. In memory of the founder, maybe it’s appropriate to wrap up with a quote from McClendon himself: “A key to success in any walk of life is having a short memory and a thick skin.”
SO WHAT ELSE IS GOING ON?
Venture capital funding in 2023 plummeted 30% from the prior year, forcing startups to do more with less. Sometimes getting to “ramen profitable” means the founder has to serve as head of sales, product designer, and janitor.
Responding to pressure from global governments, Meta is hiding “harmful” content from teens on Instagram. Pretty sure the teens have moved on to Snap and TikTok. Instagram is about as much a teen hangout as the local bingo hall on Tuna Casserole Night.
Lead pipes brought down the Roman Empire, and now they might bring down AT&T. Regulators have been meeting with telecom companies over concerns that their cables crisscrossing the country contain toxic levels of lead.
If jacked-up car insurance rates have you mad enough to drive over some pylons, you’re not alone. Auto insurance costs have spiked due to labor, parts, and vehicles all getting pricier. Accidents caused by dumbasses texting while they drive probably don’t help, either.
That’s it for today, my friends; catch you back here at the usual time tomorrow morning. Yours in capitalism, The Axe