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Linn Energy, LLC Message Board

  • lizahuang54321 lizahuang54321 Apr 26, 2013 6:01 PM Flag

    LINE versus QRE

    Over the last 1 year, the charts of LINE and QRE are close to identical.
    You might as well get the higher yield offered by QRE.

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    • More flat earth dark ages wisdom from the high priestess of the snark school of occult investment theories.

      Ex-ante and Ex-post concepts in the real world where the light of common sense rules.

      Markets look forward and adjust returns for the perceived level of risk and uncertainty. Claiming superior returns without discussing the level of risk is well - flat earth and dark ages French Cromag style not substance. Well as mentally of substance as the French ever get as they never seem to change.

      . But I will have to leave it at this most basic and glaring error of your understanding as all the other mistakes are to numerous and exceeds the time limit for address. .

    • Please clarify the info in the post over there.....remind us how much was the QRE management fee that is discussed over on that message board?

      Is that info correct?

      It is from a March 6, 2013 post and this is the thread title:
      "QRE 6 million shares is a management fee equal to $100 million, unit holders should sell"

      but I do not follow it, so please post the correct number.............. if you know.

      • 2 Replies to sandonthebeach47
      • I dug into the details when the GP was issued the units, and this is what I came away with: the "$100 million fee" is not quite accurate. The GP was issued class B units yielding a distribution of ~$3 m/Q, which is about 80% of the annual management fee. The issuance results in the GP foregoing ~80% of future management incentive fees in exchange for owning the class B units; so the class B unit issuance aligns the interests of the GP and unitholders (i.e., both benefit by raising the distribution). The class B units cannot be sold on the public market.

        each class B unit CAN be converted into one regular unit, however, and upon conversion the class B units would have a market value of ~$100 m. But as i understand it, they do not have that value now as the book value of the GP did not jump ~$100 m. So unitholders are safe unless the GP files to convert the shares, at which time there could be downard pressure on unit price

        But: since QRE has a much better D/EBIDTA, distribution coverage, and yield than LINE at the moment (even after the BRY acquisition, most likely) , a recent record of raising the distribution, and even if all the GP's class B units were converted and sold the current 11% yield would not be affected- then, a big selloff wqould be a buying opportunity for dividend investors, seems like

        if any of this is wrong i would sure appreciate correction as I have 4.2% of my portfolio in QRE shares and short 17.5 puts

      • Hey Sand,
        Dont mind Lisa, she is loosing her underwear on oil trust so she is all tied up in knots.

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