LINN Energy Announces Dismissal of Class Action Lawsuit
HOUSTON, July 9, 2014 (GLOBE NEWSWIRE) -- LINN Energy, LLC (Nasdaq:LINE) ("LINN" or "the Company") and LinnCo, LLC (Nasdaq:LNCO) ("LinnCo") announced today that the United States District Court for the Southern District of New York has dismissed, with prejudice, the securities class action litigation originally filed in July 2013 against the Company, certain of the Company's officers and directors, and certain underwriters of LinnCo's IPO.
"We are very pleased with the Court's decision and believe that the ruling supports our position that the lawsuit was without merit," stated Mark E. Ellis, Chairman, President and Chief Executive Officer.
The plaintiffs have a right to file an appeal to the United States Court of Appeals for the Second Circuit.
A full copy of the United States District Court - Southern District of New York's opinion issued on July 7, 2014 is posted a
I do not understand it and that's why I added LNCO to my holdings when it dropped to $26 a while back. It seems to me they should be trading in a much closer proximity to each other and that LNCO is the better buy at the moment. The only reasons LNCO would trade less than LINE would seem to me to be 1) tax implications, 2) BRY sellers and 3) general composition of holders. My impression, perhaps wrong, is that LNCO is held by more professionals while LINE is held by more retail holders. The pros may be slower to get back into a stock with a sordid recent history.
I hold nearly 200K units in various accounts. Having purchased my position last summer on the fall, I am very pleased with management. While they perhaps got overly aggressive with put accounting and set themselves up for the bear attack, it was the bear attack with the resulting SEC inquiry that spoiled the BRY deal. Since that time, they have done the right things with the cards they hold IMO and the environment remains constructive (high commodity prices, low interest rates, plenty of acquisition targets) for them to implement their strategy. I suspect we will see your $35 to $37 objective this year. However, to get back to $42, it will likely take an increase in the distribution and a general expectation that further increases will continue in the future. I just don't see this stock trading at less than an 8% distribution rate. An 8% distribution today would be a stock price of $36.25, so that may be a cap without further distribution increases or other materially favorable news, but that's quite a bit higher than we are today. GL
Let's say you bought LNCO for $31 yesterday and sold 18,602 November $27 call contracts for $4. You would reduce the cost of your purchase from $31 to $27. You then get 5 months worth of dividends ($1.20) and your initial investment is returned to you if LNCO stays over $27 by November.
I can see a number of reasons for selling these calls such as boosting dividend yield or protecting your downside but from my perspective the only reason for spending $7,440,800.00 buying these calls is you are certain LNCO in going to be considerably north of $31 by expiration.
This was just one of many curious options buys yesterday in both LNCO and LINE which leads me to conclude the train is about to leave the station, so it's time to get on board while you can.
Sentiment: Strong Buy
It has been more than a year since the LNCO high of $42ps then a month
later a drop to 37ps... then the negative Barrons article spurred the massive drop to a low of $25ps...we have re-elected the same management and have been patient with them for a year while the overall market has done nothing but go up and up, please chime in and tell me how much longer we have to be patient with this management to get the price moving upwards to at least the $35-37ps range again of over a year ago, thats not asking a lot as all those negitive issues are gone now and it is now up to management to move this stock a little more aggressively In my book, before we are forced to look for some new leaders who can!!! After all we pay these guys very well for running this MLP!
Make that $1.70. Put a spread on at $2.06 LINE over LNCO, but have now given back most of the gains I had when it got down to about 65 cents... disappointing.
opinions, good point but, I am all about the high divvy. Old and gray now and have to support my lifestyle with them. Maintain or slowly grow the the principle and still continue to pick up that $125k a year from the market is my game plan. So far so good but, we haven't hit that correction yet.. Also, I was wrong about today but, in my defense the whole mkt i ngeneral is getting it's but kicked.
This is about as a consistant and gradual drop as I have seen when you look at a chart and start with July 1st(1 week ago). We need a straight up spring to overcome such fall. We are approaching almost a $1 drop in share value since a week ago today. Need 4 monthly dividends to make up such a reduction in stock value. We all know what happened about 1 year ago beginning in July admittedly for a different reason, but I hope history is not about to pull a repeat.
If the divie gets below 9% then that would mean we had a nice SP appreciation. Which translates into a profit on both ends. No need to sell to move to another investment.
That's a fair point, though arguably the effect would only last until the new stockholders sold out. I wasn't suggesting you were the average Joe :).
I understand there isn't dilution, it just places LNCO in weaker hands as the acquired may not have any interest in holding.
Using LNCO as an acquisition vehicle doesn't matter, LNCO stockholders aren't diluted any more than LINE, but the average Joe may not understand that. The tax difference logically will not be expressed as a percentage of price, but as an absolute dollar amount, the dividend times the present value of future tax costs, less the future benefit of tax savings at sale. Being as that computation depends on assumptions like how long one holds, it's not a certain number. The market will decide how to value it.
I would guess about a 5% difference is as high as it will go. 50% tax related, 30% concern over using LNCO as currency and 20% BRY selling related.
It happened back in February, but then fell back towards the buck again. Too early to say it's an actual market re-pricing between the two.
not sure.... but know I wouldn't worry too much about it. I own quite a few shares... and watch it very closely. Not alarmed.
It usually stays around $1.00 difference. Just wondering if anybody else has noticed this and I am wondering the why of it? Any thoughts appreciated.
Choo, General malaise in the market today. I had a sea of red in my portfolio. Granted there were a few winners but, not many. In spite of the profit taking IMHO we may see a nice up day tomorrow for LNCO as many still want to capture that 9+% divvy. I get the feeling that there are a lot of investors out there who love the divvy. As long as the divvy stays above 9% it is a hold for me. Getting below that I feel there may be other alternatives that will pay better. Realistically, LNCO will stay in this low $30-33 area until they can put all the pieces together and produce a good quarter or two. Then who knows-maybe $40 is the new figure.