If he threw in the towel on the Berry deal, I hope he lost money. I found it all unsettling but still bought 4.5K at 35.90 (plus sold more puts) and sold today for a very nice profit. Sheer luck, of course. Hempton is really misusing the Ponzi scheme notion, but he knows dramatic hyperbole like that scares investors into bailing. I bet there are more shorts who receive their wedgies next week. Just to be in the game I bought 20 of the March35 calls today at just about intrinsic value. I'm hoping for a shot at 39.50.
John Hempton throws in the towel on his Linn Energy (LINE) short following yesterday's acquisition of Berry Petroleum (BRY). It's a swap of what Hempton believes is near-worthless stock for old, but valuable oil assets. Those assets can generate enough cash to keep what he believes is a Ponzi, rolling for many more years.
Yea but management is not doing any more puts for the foreseeable future. So hard to say what Ponzi scheme he is prattling about now. ;-)
Sad thing is he is probably walking away very rich. Very much doubt he ever intended to hold the position until the call. Mostly taken from individual investors in LINE.