Linn Energy, LLC (LINE) Message Board
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LINE down and LNCO up???
Strange price action today. These should be trading in tandem, right?
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Pretty clear to me because LNCO has a 1099 tax form and LINE has a K 1 form.
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They're not exactly on a bicycle built for two. There will always be trading vagaries. But you can safely assume, I think, that LNCO will be trading between 2 and 3 points lower than LINE. The lower price probably discounts the threat of higher taxes for Linn Co come post-2015.
- 2 Replies to ronharv
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Oh goodness.
The only way for that to happen would be for the partnership units to produce ordinary income. It washes out no matter which you own. -
I disagree. I don't think the market is looking out that far.
The difference is what people will be paying after taxes now. Assuming one pays taxes on 20% of LINE distributions, the discounted yield is 5.6%.
Assuming one pays taxes on 75% of LNCO, you also get 5.6%.
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Sorry the OLB is throwing their emotional tantrums again.
Yes LINE and LNCO should trade within one or two percent of each other. So there is some free alpha or extra return on the table for investors.
There is no rational reason LNCO should yield more than the partnership units. So if you are going to invest in Lynn Energy LNCO is the one to buy right now.
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