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Inergy, L.P. Message Board

  • garydouglas1 garydouglas1 Jan 27, 2012 1:58 PM Flag

    Please Explain This Severe Down Move

    I would greatly appreciate the well-considered explanations from both knowledgeable Longs and Shorts. Other than the downgrades --- which didn't seem severe enough to warrant such a catastrophic drop in share-price --- I don't understand what happened here; and I would very much like good explanations from more experienced individuals. Thanks in advance!

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    • Gary,

      Management indicated that they were considering a distribution cut for next quarter due to poor business performance. Previously management indicated they were willing to borrow money to pay the distribution until cash flow improved. Wells Fargo just lowered their target price to $17-19 per unit from $32-34 per unit.

      Jim

      • 1 Reply to geotype50
      • Management's message was that the dividend is probably going to be cut. However they didn't give any specific numbers. The lack of specificity causes fear so investors bail and move to what they believe is a more predictable return on their money. This stock may bounce back somewhat but not much until there are more specific numbers on the dividend and the fear is removed. I sold this morning and bought SDT - who knows - it's all a gamble.

 

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