There hedging strategy was accounted for incorrectly...so they correct it ....possibly dividend reduction..how much 10% The price has already corrected for that from 37 to 31... What else is the market expecting? A collapse of Nat Gas Prices ... We had that last year... Complete corruption .. possible but not probable...
So we have General Fear ... With General Fear ...Its always a good time to invest!
Whats funny, is the accounting of the hedging strategy is not being questioned. What is being quesitoned is the non GAAP view managment suggest shareholders use when evaluating the stock. This is unregulated and has zero impact on cash available. Remember, LINE buys puts which takes cash (as opposed to selling calls) to implement its hedging strategy. So its not like they are getting extra cash for their hedging.
The accounting case as explained is a complete sham. Something else is happening and I do not know what, but this is being treated by the market as fraud not a GAAP accounting issue.
I think the fear, is they are selling future earnings to pay today's dividend. I know of no easy way to measure this other than to say that percentage hedging levels have not really changed, nor are they projected to change.
I am very disappointed management is not releasing a slide show to explain the issue and defend their past actions as well as show how using hedge eyes suggestions would impact cash flow and balance sheet. A little transparency would go a long way right now.
You have no idea, nor does anyone else, what's going to happen here! The naysayers claim this company is a ponzi scheme. I suspect that's not the truth, but who knows for sure? In the meantime, this is a battlefield, dead money. Move on, just not worth the risk!!
After many years of investing .. I've learned low risk = low or no return; higher risk = higher return..
Any serious money I have made was always investing in something that looked risky at the time...
There was never more perceived risk than in March 2009..Nuff Said.
There has never been any reward without risk. Uncertainty has scared a lot of people out of Linn Energy. Nothing that has come out affects Linn's cash flow or business model. This is opportunity, similar to 2008/2009 period.