The market could be making too much of Carl Icahn's decision to cut his stake in Chesapeake Energy (CHK) Tuesday.
Shares of the Oklahoma City-based oil giant were down about 4% in premarket trading after the billionaire activist said he's reduced his stake in the company's stock to 4.6% from 9.6%. But it seems he still has faith in the management of the rebounding company, whose shares have now more than doubled in 2016, and the decision to let the majority of his Chesapeake stake slip has mostly to do with tax planning.
"We believe that over the last few years [CEO] Doug Lawler and his team have done an admirable job, especially in light of the circumstances," Icahn said in a statement. "We reduced our position to recognize a capital loss for tax planning purposes." (Chesapeake Energy is a member of Real Money's Stressed Out watch list.)
Chesapeake shares were also sliding on a continued fall in crude prices, which were down about 1.1% before the opening bell -- to $42.83 a barrel. The markets in general were up slightly, with the S&P 500 and Dow Jones Industrials up about 0.4% and 0.3%, respectively.
Meanwhile, there may also be too much headline hype over Wells Fargo's (WFC) $100 million settlement with the Consumer Financial Protection Bureau, over opening millions of fake banking and credit accounts. At least according to analysts with Morgan Stanley, who upgraded their rating on the San Francisco banking giant to Overweight from Equal-weight.
"We don't think dividend is at risk," the analysts said. "Yes, we could see some more volatility ahead as headline risk persists -- particularly around CEO John Stumpf's testimony before the Senate Banking Committee on Sep. 20, and other regulatory investigations -- but we do not think any of this puts the dividend at risk." (Wells Fargo is a holding of Jim Cramer's Action Alerts PLUS charitable trust.)
Finally, Sarepta Therapeutics (SRPT) shares got a major booster shot by RBC Capital Markets analysts, as the stock climbed more than 8% before the opening bell after an analytics team at RBC upgraded the stock to Outperform from Sector Perform, based on the accelerated FDA approval of its Duchenne muscular-dystrophy treatment, which analysts said in a Monday note could be a "major game changer."