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Linn Energy, LLC Message Board

  • don1cobb don1cobb Jul 4, 2013 8:11 PM Flag

    A look at Linn

    Linn is a real company. They have 19,000 wells, 800 million BOE of proved reserves (Worth about 80 billion), 1100 employees, and locations in multiple areas of the country. Their book value in around 4 billion and sales are about 1.7 billion. So what is the magnitude of the issue of how they treat the hedging puts that they have bought. Accountants have a great term that I think applies here - immaterial. Is this issue going to force the company into bankruptcy and send the CEO to jail. I seriously doubt it.
    Now will the stock go lower? How long will it take to correct to a more logical value? I have no idea. But at the closing price on 7/3, it is yielding 12.7%. I can borrow money in my margin account at 8% and make 4.7% on someone else's money. I like that. If it goes even lower, I like it even more. This will all be settled and in hindsight will look like a molehill. As Warren Buffet said "When it's raining money don't go outside with a thimble, take a wheelbarrow.

    Sentiment: Strong Buy

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