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Stocks to watch: Icahn demands shakeup at Chesapeake

Chesapeake Energy Corp. extended gains in the post market after billionaire investor Carl Icahn revealed a 7.6 per cent stake in the natural gas giant and called for the company to replace at least four of its directors.

The activist investor asked the company for two board seats for his own representatives and two for another large shareholder, Southeastern Asset Management.

A regulatory filing showed that Mr. Icahn holds 50.1 million shares in Chesapeake, making him the third-largest shareholder in the company, according to Thomson Reuters data. The stake is valued at about $785-million (U.S.) and was greater than what news reports had speculated late on Thursday.

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The company has come under heavy criticism for allowing CEO Aubrey McClendon to borrow money from companies that do business with Chesapeake and giving him the opportunity to buy personal stakes in company wells.

Chesapeake shares are up 1.6 per cent in the post market. They closed the regular session at $15.81, up 1.5 per cent for the day.

Elsewhere, Facebook shares fell a further 1.9 per cent in after-markets trading after sliding 3.4 per cent in the regular session. The shares have fallen more than 16 per cent from their initial public offering price of $38 last Friday amid a flood of complaints about the IPO process.

Next week's lookahead

While Greece and Spain have been grabbing the euro headlines lately, the focus will shift to Dublin next Thursday, when Ireland holds a referendum on the European Union's fiscal compact.

The fiscal compact does not require Irish ratification, but EU leaders have tied future bailout disbursements to Ireland to a positive outcome on the referendum.

Markets will also be watching for the release of some key indicators, in both Canada and the United States.

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On Friday, Statistics Canada releases its report on how Canada's economy fared in the first quarter of the year, and analysts expect to see annualized growth of between 1.8 per cent and 2.2 per cent, compared to 1.8 per cent in the fourth quarter of 2011.

Friday also brings the widely watched U.S. jobs report, this one for May. Economists generally expect to see job creation of about 150,000 and an unemployment rate of 8.1 per cent.

Canadian bank earnings continue, with Bank of Nova Scotia on Tuesday, and Canadian Imperial Bank of Commerce and National Bank of Canada on Thursday.

The week should start off on a quiet note, however, given U.S. markets are closed for the Memorial Day holiday and no major Canadian corporate announcements are scheduled.

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About the Author
Investment Editor

Darcy Keith is The Globe and Mail's Investment Editor. He has been a business journalist since 1992 and joined the Report on Business in 2010 from Yahoo! Canada, where he was the senior editor of finance. More

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