The acquisition of BG Group by Shell has implications on ETE/ETP with respect to the Lake Charles LNG asset. I think the market wanted to de-risk the value for ETP since there is a new owner with a huge balance sheet (that is likely attracted to the long-term value of the asset), but it looks like it didn't hold.
ETE loaded us up with debt while they take part of the income stream free and clear. Yes, ETE screwed ETP shareholders all you need to see is that we hold more debt than our market cap and the share price is down 20% while ETE is close to 52week highs. It's gonna take years to work off this debt and 3 years of the income stream just to get back to the value we had a few months ago, so YES we got screwed.
Yes, we may get hurt more if ETE is using stock to take over ETP. 4 months ago, ETE was 57 and ETP was 65, now it is reversed. Kelcy is a biggest holder of ETE 15.06% outstanding shares (from ETrade, Top Owner), not ETP, not RGP either.
No doubt there has been a huge cap flight since $69. I feel $69 on the heels of KMI consolidating/simplifying. The fact is the market does not like the Regency deal. ETE is also going up including optiosn for all the wrong reasons. This guy can't get out of his own way!
I found it on Fido. I see with the purchase he only has 40,000 shares. No other activity though!
03/11/2015 WELCH, JAMIE Chief Financial Officer Buy 20,000 $54.97 1.1M 40,000
ETP is one of the weakest of the MLPs. Whatever the cause, it's disconcerting to say the least. I wanted to be out before the ex- date, but it doesn't look like that will happen. The thin market is hurting.
Completely agree. Look at ETE near a 52-high at $65. ETE did everything to screw the unit-holders of ETP. I bet two years down the road ETE will split again at $80 and pass ETP again in the $70 range. ETP is doomed to be a high yielder and ETE is a capital appreciator with a faster growing distribution.
.995 x 4 = 3.98 divided by stock price gives you 7.21 % if it keeps raising it it's much greater please tell me where to get over 7% and a stock who has never cut thier distribution since it started trading back in 1996 thats 19 straight years of no cuts in distributions nothing better out there.
This is exactly my concern and obviously some large investors as well. They now have a crushing Debt burden and the easiest thing for them to do is cut the distribution to handle all this new bebt that has to be serviced. ETE of course could care less because they get additional rev. without having to worry about the debt payments, they have made that ETP's (and our) problem. If they cut the.
If the distribution gets cut we drop another $10 - $15 overnight and I think some big holders are worried about that happening. If it does the class action suits will be flying and I'll be signing on to one of them.
It looks to me ETP to have trouble with coverage ratio coming up, unless ETE cuts it some slack. Weaker market conditions, lower production in certain regions, and no benefit from one time costs that are added back to cash flow may mean weak numbers for this Q, although I can't see ETP going too much lower...