With the news of the lawsuit being dismissed, and upcoming earnings announcement expected Aug. 4th, news for LNCO is positive. Look at a daily chart if you're a techie, and you see a nice cup formation. With a nice divy, you can afford to hold this stock. The divy seems to be very secure now. LNCO should be heading to the $34-35 range in short order for another 10% gain, JMO. In the meantime, I'll take a 9%+ monthly divy to the bank. The bad new is in the rear view mirror. Time to add to this winner now trading @ $31.
Sentiment: Strong Buy
"Timing seems about right for a PPS hit today, with it going I am assuming the shorts are going to hammer this thing out of the gate."
Well, Chris, at about 1:15 E.S.T. LNCO's up over $.20, so it seems the shorts haven't found their hammer yet.
LINE's holders have typically held their stock longer than LNCO holders. They would be hurt more by selling because the basis in their shares has been lowered by the years of distributions and they would suddenly have a huge tax bill (capital gains). LNCO holders have typically held the stock since the BRY merger, and can trade their shares without that tax burden. Also, from the perspective of LNCO holders (who got the stock in the 20s), they are currently experiencing personal all time highs in the stock, and there may be some temptation to sell and take $$ off the table. Bottom line is that LINE's legacy holders are not selling because of the tax burden and LNCO's recent holders are tempted to sell at what they see as their personal all time highs in the security. This means there are more LNCO sellers than LINE sellers, and that tends to lower the price of LNCO relative to LINE because of the basic law of supply and demand (i.e., LNCO's "supply" is higher because of the sellers). Personally, I am not locked into a long term tax relationship with LINE, and so I own LNCO for its higher yield and simpler tax reporting.
Glad they did not settle this 'nuisance', case and give some bloodsucker law firm $10 million just to go away. It would be great if more companies followed this route and made those firms lose money
Management has done a good job overall, not great, but good.
I voted to approve the management.
I purchased my shares in the upper 20's and low 30's, and am ahead, so I am happy.
The Divi is good, and secure. This is a long term play
Grow rich slowly.
What possible difference does it make to us whether we like management or not? Retail investors are totally powerless in such matters. May as well be angry at the wind. The structure of the company and how its run are just part of the background, you accept it and hold the security or you don't and sell.
gardner, lawsuits been dismissed, & I'm pleased with managements handling of the attack, your collecting a nice divvy to be patient, if that's not enough, you can liquidate your holdings & go to another better stock!
No surprise here. They sue just because the stock dropped on an SEC inquiry. It's a race to see who gets to represent the class, should one ever be awarded. When it turns out the SEC doesn't come up with anything, there is no longer a basis for the suit. The attorneys were just going for a settlement anyway and hoped never to find themselves in an actual suit that cost them time and money. I wish we would have some reforms that forced those making these frivolous suits pay when they lose. It would greatly reduce the taxpayer expense for such waste.
Watching the shorts increase here quite a bit in July. Yesterday the short volume was about 1/2 the trades.
So I guess one of two things is going to happen. Either they are going to be forced to cover at a loss, or they are going to drive the price down hard at the open today to try to get some panicked sellers so they can cover...
Timing seems about right for a PPS hit today, with it going I am assuming the shorts are going to hammer this thing out of the gate...
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!