Response to Inaccurate Statements made by an Anonymous Short Seller", attached hereto as Exhibit 99.1.
On February 15, 2013, Linn Energy, LLC posted to its website a presentation entitled "LINN's Hedging Strategy and Response to Inaccurate Statements made by an Anonymous Short Seller", attached hereto as Exhibit 99.1.
Wow looks like some one use the bad news from natural gas EPs with the lower natural gas price to scare individual investors out of their position. Of which the 'who is that analyst' RLP'D posted could well have been a part. But the board mome troopers are not sophisticated enough to understand but sock puppet enough to grab and spread.
These are exceptionally strong statements from management of concrete facts. Their lawyers are sure to be jumping up and down.
It is an interesting ploy. But I fail to see how buying puts which is a use of cash could be confused by knowledgeable investors as some how selling puts to pad cash flows. Guess that is where the in the money ploy came in.
"LINN has never and will never purchase deeply in the money puts to manipulate its cash flow stream"
That certainly would have shown up dramatically in collapsing future average hedge prices.
Very odd that this appears to have been so effective for such a large and well covered company by a large number of analysts. This is not the small partnership with no coverage as the Progressive stock market crash unfolded.
The timing was also going into a long weekend for wall street when many would leave early for the long weekend.
I think it is pretty clear that the company was trying to assure investors that their hedging program was aimed at making sure they had a distributable cash flow that would protect the dividend.. I assume their hedging program limits their upside earning potential if the price of oil/gas rises but limits exposure on the other end. For those who count on the distribution, that would seem like a great position to take. There are MLP's and ETF's that investors could choose to maginify their profit potential if they had firm beliefs in the direction energy commodities were going in the the short/medium/long term.